GIC Continues to Generate Good, Stable Returns Over Inflation; Increases its Investments in Inflation-resilient Assets; Expands its Sustainability Integration Efforts; And Believes its People and Culture are Critical for Navigating a World in Transition

27 Jul, 2022 ∙ 2 Mins Read

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SINGAPORE, 27 JULY 2022 – The GIC Portfolio achieved an annualised USD nominal rate of return of 7.0% over a 20-year period that ended 31 March 2022. After accounting for global inflation, GIC’s annualised real rate of return stood at 4.2% over the same period. This means that over the past 20 years, from April 2002 to March 2022, GIC has achieved an average annual return of 4.2% — over and above the global inflation rate. The rolling 20-year real rate of return is the primary metric for evaluating GIC’s investment performance. It is in line with GIC’s mandate to preserve and enhance the international purchasing power of the reserves under its management over the long term.

“Today investors are facing a rapidly shifting investment landscape with profound uncertainties emerging on multiple fronts. The macroeconomic environment has entered a high-inflation regime, driven by supply chain disruptions, a rapid recovery in demand, and rising wages. In addition, the world is facing increased risk of fragmentation as geopolitical tensions continue to rise. At the same time, sustainability tasks have become more urgent,” said Mr Lim Chow Kiat, Chief Executive Officer of GIC.

“Given these uncertainties, we have doubled down on our core investment principles — diversify our portfolio, take the long view, and emphasise preparing rather than predicting,” added Mr Lim. This year’s report highlights GIC’s approach to navigating these ongoing risks, through continued portfolio diversification, increasing investments in real assets, and exploring alternative strategies.

GIC also announced the establishment of a dedicated Sustainability Office, which will deepen our research into key sustainability issues and push to integrate sustainability into all our investment and corporate processes. This reflects our commitment to support the global transition to net zero in the real economy, and is in addition to our rising investments in new technologies, and engagement with our portfolio companies to support their decarbonisation and transition efforts.

Our people and culture are particularly critical in navigating a world in transition. This year’s feature article, The Biggest Value Add, elaborates on our values and culture, which enable GIC to take bold and calculated risks in an uncertain investment environment.