We represent our Policy Portfolio in three broad asset groups: Equities, Fixed Income, and Real Assets. These include investments in developed market equities, emerging market equities, nominal and inflation-linked bonds, private equity, real estate, alternatives, and infrastructure.

The Active Portfolio comprises a group of investment strategies that adds value to the Policy Portfolio from our teams’ skills and competitive advantages, while broadly maintaining the same level of systematic risk.

Active strategies are funded by Policy Portfolio assets with similar overall risk profiles. This funding is the cost of capital for the active strategy, over which the strategy is required to generate additional returns.

We focus on owning assets with good long-term earning potential, at reasonable prices. Capitalising on our core strengths, we work to find attractive bottom-up investment opportunities.

The Client owns the funds that GIC manages, and decides on the overall risk preference.

Our Client has characterised GIC’s risk preference using a portfolio of 65% global equities and 35% global bonds. The Reference Portfolio is not a benchmark, but an expression of the overall risk that the Client is prepared for the GIC Portfolio to take.

GIC’s investment strategy is to build a portfolio comprising asset classes that can generate good long-term returns above global inflation while adhering to the Client’s risk parameters. There will be differences in exposures and the level of risk between the GIC Portfolio and the Reference Portfolio. GIC allocates to a better-diversified range of assets beyond just equities and bonds. We may also adjust our level of risk in times of market exuberance or when significant opportunities arise. This is all part of a disciplined, professional approach to long-term investing.

The key to implementing our investment framework is a disciplined approach to long-term value investing.

We assess the value of an asset and maintain price discipline, even if it may mean going against market sentiments.

To do so, we consider drivers of risk and return for each asset class to establish where true fundamental value lies. This involves both top-down and bottom-up analyses.