Investments

Performance

Over the 20-year period that ended 31 March 2018, GIC achieved an annualised rate of return of 3.4% above global inflation. In other words, the international purchasing power of the reserves almost 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 2018 (%) 31 March 2017 (%)
Total 100 100
Developed Market Equities 23 27
Emerging Market Equities 17 17
Nominal Bonds and Cash 37 35
Inflation-Linked Bonds 5 5
Real Estate 7 7
Private Equity 11 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 2018

Investment outlook

Looking ahead to the next couple of years, the investment environment remains challenging. In view of the high asset valuations, the increased risk of monetary policy tightening across different jurisdictions and the elevated uncertainty, GIC maintains a cautious investment 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 over the long term. Our active strategy teams continue to work hard to capture attractive idiosyncratic opportunities, drawing on our long-term perspective, organizational capabilities and global network.