Singapore Sovereign Wealth Fund Posts Highest Return Since 2015, But Cautions Outlook

Singapore sovereign wealth fund GIC posted for the latest financial year its highest returns since 2015, but cautioned “challenging” prospects ahead amid sticky inflation and other economic headwinds.

To manage these risks, it said it would continue to focus on investment opportunities with “stable long-term returns”, such as infrastructure.

In its 2022/23 annual report released on Wednesday (Jul 26), GIC said its 20-year annualised real rate of return came in at 4.6 percent for the year ended Mar 31. This was up from 4.2 percent in the previous financial year, and its highest since 2015 when real returns hit 4.9 percent.

The 20-year metric – a primary indicator of GIC’s investment performance – is a “rolling” return where years are dropped and added as the computation window moves.

For instance, the figure for FY2022/23 represented the average annual return of GIC’s portfolio between April 2003 and March 2023, with global inflation taken into account.

GIC noted in its report that 2022 was a challenging year marked by soaring inflation and aggressive monetary policy tightening, Russia’s invasion of Ukraine and a deterioration in US-China relations. Both equity and bond markets corrected amid the difficult market environment.

A diversified portfolio and cautious investment stance provided it with some cushion from the market correction, it said.

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