GIC must keep its eye on containing risks

Its defensive position has helped with the turmoil of these extraordinary times, and it needs to focus on protecting and enhancing the reserves under its management.

Published Mon, Jul 27, 2020 · 09:50 PM

GIC

THESE are extraordinary times. We are at the confluence of a public health, economic and financial crisis.

We have seen extraordinary developments and swift responses, including drastic mobility restrictions, draconian public-health measures, record fiscal and monetary stimulus, urgent steps by businesses to conserve cash and wild financial market movements.

Navigating the environment with caution and resilience

Despite the turbulence, GIC's portfolio performance has remained resilient. This year, the 20-year annualised USD nominal return of our portfolio was 4.6 per cent. Adjusting for global inflation, the annualised 20-year real return was 2.7 per cent, down from 3.4 per cent last year.

The reduction was largely due to the dropping out of a very strong tech-bubble year return 21 years ago, rather than the recent market m…