The Policy Portfolio comprises six asset classes: Developed Market Equities, Emerging Market Equities, Nominal Bonds and Cash, Inflation-linked Bonds, Private Equity, and Real Estate. Diversification enables the Policy Portfolio to generate good risk-adjusted returns over the long term.

The Active Portfolio comprises skill-based strategies to add value to the Policy Portfolio, while broadly maintaining the same level of systematic risk.

Each active strategy is funded by a Policy Portfolio asset class or combination of asset classes with a similar overall risk profile. The strategy must generate higher returns to compensate for the cost of capital and higher risk involved.

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.

Characterised by a portfolio made up 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 may 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.