Investments

Performance

Over the 20-year period that ended 31 March 2017, GIC achieved an annualised rate of return of 3.7% above global inflation. This means that we have more than doubled the purchasing power of funds invested with us since 1997.

Our rolling 20-year real rate of return

At GIC, we aim to achieve sustainable real returns over a 20-year horizon, so as to preserve and enhance the international purchasing power of the reserves we manage. Our goal is expressed in real terms because we must, at the minimum, generate a return above global inflation.

Our Client’s assessment of our performance is based on both our rolling 20-year real return, and the risk taken to achieve these returns.

A diversified, resilient portfolio

We maintain a diversified portfolio spanning six core asset classes, each with a different risk and return profile.

Our Portfolio is constructed to be resilient across a range of plausible market economic conditions, while generating positive long-term returns. This requires it to be well-diversified. By spreading our investments across asset types, regions, industries and companies, the GIC Portfolio is more diversified and less sensitive to market volatility.

Asset Mix of the GIC Portfolio 31 March 2017 (%) 31 March 2016 (%)
Total 100 100
Developed Market Equities 27 26
Emerging Market Equities 17 19
Nominal Bonds and Cash 35 34
Inflation-Linked Bonds 5 5
Real Estate 7 7
Private Equity 9 9

Investing globally

Asset allocation is our primary focus in portfolio construction, but we also closely monitor our exposures across countries. The geographical distribution of our portfolio is a reflection of where the bottom-up opportunities are.

Geographical Distribution of the GIC Portfolio as of 31 March 2017

Investment outlook

Valuations remain high across most major asset classes. Given the expectation of modest economic growth and earnings, we expect low returns over the next decade.

In this environment, our focus is to own assets with longer-term earning potential at reasonable prices. We continue to proactively source attractive bottom-up investment opportunities, taking advantage of our long-term horizon, investment capabilities and global reach.