SINGAPORE: Singapore’s sovereign wealth fund GIC, which ranks as the 7th largest in the world with US$936 billion (S$1.27 trillion) in assets under management (AUM) according to GlobalSWF, reported a stable 3.8% real rate of return over 20 years.
The fund’s annual report, “GIC Report FY2024/25,” released on July 25, showed a slight decline of 0.1 percentage points from last year’s performance. Unadjusted returns were at 5.7% in US dollars, based on a rolling 20-year analysis.
The portfolio shifts reflect strategic adaptability. GIC’s investment landscape experienced significant changes in geography and asset classes. The portfolio’s exposure to the Americas increased from 44% to 49%, mainly due to US investments. In contrast, exposure to Asia-Pacific fell from 28% to 24%.
Additionally, the asset mix shifted, with real assets remaining constant at 23%, fixed income falling to 26%, and equities increasing from 46% to 51%.
GIC has identified three key transformative forces: artificial intelligence (AI), climate change, and shifting global dynamics. The fund is adopting a detailed investment strategy, classifying potential AI investments as enablers, monetisers, and adopters.
“Granularity is about looking two, three layers deeper,” notes Group Chief Investment Officer Bryan Yeo, underscoring the fund’s refined approach to new technologies.
The fund’s monthly return volatility hovered around 7% over 5- and 10-year periods. GIC’s strategy emphasises long-term value creation while avoiding permanent capital loss through diversification and agility.
GIC is also integrating AI within the organisation. For instance, it is testing a chatbot with its real estate and fixed income teams to improve analytical capabilities. The fund also takes a practical approach to sustainability, focusing on real-world transition rather than superficial portfolio changes.
Commenting on the tech integration, Lim Chow Kiat, CEO of GIC, shared: “Our organisational strength underpins our investment capabilities. One area demanding concerted effort and commitment across all levels of the organisation is technology integration. Like many, GIC is actively building its AI capabilities.”
“This includes in internal audit, where we leverage AI to detect anomalies in both structured and unstructured data, automating the analysis of large and diverse data sets to identify risk trends and focus areas,” he adds.
In its annual report, the fund acknowledged complicated global issues. Increased geopolitical tensions, technological disruption, fragmented trade, and changing economic dynamics are a few of these.
Speaking on these challenges, Lim said, “In an increasingly more volatile and fragmented trade system, policy decisions can quickly reverse advantages, reminding us that today’s winners may not remain so tomorrow.”
Lim observed that the current fragmentation of the global trading system is also unfolding in capital markets. This also extends to financial systems, which are divided along geopolitical fault lines, complicating cross-border investing.
In response to this, GIC’s investment strategy now focuses on three main principles. These are geographic and asset class diversification, tightly focused investment strategies, and rapid response to new market trends.
Despite challenging international circumstances, the fund notes that it is employing transparent methods and a cautious strategy to manage Singapore’s reserves.
While navigating an increasingly complex investment environment, the fund remains committed to creating long-term value. GIC tends to rely on two pillars in managing the portfolio: top-down portfolio construction and bottom-up asset selection.
Speaking on the funds investment approach, Lim said, “We diversify with intent, deploy with granularity, act with agility, and invest in partnerships, always taking the long view, protecting against permanent impairment, and preparing rather than predicting.”
GIC is also noted to be actively engaged in a strategy of partnered investments, with a track record of co-investing with major sovereign and state investment funds worldwide, across more than 40 markets.
“2025 may be a turning point in markets — and in history. ‘There are decades where nothing happens, and weeks where decades happen.’ We are living in one of those moments. As the investment world grows more complex, our responsibility to steward Singapore’s reserves— with integrity and foresight—remains our guiding purpose,” notes Lim.
