GIC focuses on long-term value, avoiding permanent loss amid volatility

Forces shaping global investment scene now go beyond any market cycle or trend: CEO

- Ovais Subhani

Singapore's GIC said it will continue to diversify across asset classes, geographies, sectors and time, and act with agility as it seeks to deliver steady inflation-adjusted long-term returns.

Keeping to this investing approach is all the more crucial amid the unprecedented shifts in the investment landscape, said the sovereign wealth fund, which manages the Republic's foreign reserves.

Presenting GIC's 2024-2025 annual report on July 24, its chief executive Lim Chow Kiat said the forces shaping today's global investment environment go beyond any market cycle or structural trend.

"They strike at the foundations of the global order. They are rewriting the rules of global investing," he said in his letter to stakeholders.

"Today, these forces have only intensified and are much harder to prepare for," he added.

Faced with these profound changes, Mr Lim said, it is tempting to chase the short-term hype or retreat in the face of the unknown.

"At GIC, we do neither. We focus on long-term value, with an emphasis on avoiding permanent loss. We apply 'inversion' — studying the typical causes of permanent impairment in order to steer clear of them."

At the same time, technological shifts such as artificial intelligence (AI) present the opportunity for GIC to diversify investments across markets and assets and use granularity and agility in investment decisions, ensuring long-term real returns.

For the year ended March 31, the fund reported a 3.8 per cent rate of return, measured in the US dollar and adjusted for global inflation for an annualised rolling 20-year period.

The return was lower than the 3.9 per cent reported in the previous year and the 4.6 per cent posted in the year before that.

"Our long-term returns remained stable, though in recent years, a confluence of factors has affected this performance," Mr Lim said.