Investments

Performance

Over the 20-year period that ended 31 March 2019, GIC achieved an annualised rate of return of 3.4% above global inflation. In other words, the international purchasing power of the reserves nearly doubled during the 20-year period.

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 31 March 2019 (%) 31 March 2018 (%)
Total 100 100
Developed Market Equities 19 23
Emerging Market Equities 18 17
Nominal Bonds and Cash 39 37
Inflation-Linked Bonds 5 5
Real Estate 7 7
Private Equity 12 11

Investing globally

While the GIC Portfolio’s asset allocation is constructed to achieve an appropriate long-term balance of risk and return, the geographical distribution of the portfolio is fluid and depends primarily on market capacity, economic cycles and investment opportunities.

Geographical Distribution of the GIC Portfolio as of 31 March 2019

Investment outlook

The investment climate remains challenging over the next few years. In view of the high valuations, slowing global growth and significant uncertainties, GIC maintains its cautious portfolio stance.

It is all the more important to maintain strong price discipline in this environment. This means not overpaying for assets, and reducing exposure when the risk-reward trade-off is less favourable. We also continue our efforts to strengthen our networks, build capabilities and seek attractive alpha generating opportunities, drawing on our long-term investment approach and global network of partnerships.