The brand of the Authorities of Singapore Funding Corp. (GIC)
Munshi Ahmed | Bloomberg | Getty Photographs
Singapore’s sovereign wealth fund GIC reported steady returns for the yr however warned of “profound uncertainties” as buyers face worries about inflation, pandemic dangers and geopolitical challenges.
The fund’s portfolio recorded an annualized greenback nominal charge of return of seven% over a 20-year interval ending March 31, 2022, GIC mentioned in its annual report printed on Wednesday.
It additionally achieved an annualized rolling 20-year actual charge of return of 4.2 % for the interval ending March 31, after stripping away inflation.
Nonetheless GIC, which is among the many world’s largest buyers, painted a slightly bleak image of the worldwide setting.
“Years of considerations over deflation have changed into worries of elevated inflation, forcing financial policymakers to reverse stimulus insurance policies,” mentioned Chief Government Lim Chow Kiat within the report.
“On the similar time, the clock for the local weather disaster is ticking, pandemic threat lingers on, and geopolitical conflicts and home political schisms are rising. There are not any simple decisions for policymakers and enterprise leaders, and in flip, for buyers.”
Because of this, the CEO mentioned he expects portfolio diversification to be “more difficult as few belongings are spared from the consequences of worsening inflation and slower financial progress.”
GIC mentioned its diversified portfolio and cautious funding stance helped cushion its efficiency from the market correction that occurred in early 2022.
“Given these uncertainties, now we have doubled down on our core funding ideas — diversify our portfolio, take the lengthy view, and emphasize getting ready slightly than predicting,” Lim mentioned within the report.
Amid the worldwide shift to a low-carbon financial system, the fund introduced it has arrange a devoted workplace specializing in sustainability, to ramp up give attention to that entrance.
The brand new workplace will deepen analysis into important points and combine sustainability additional into all its funding and company processes, GIC mentioned as a part of the discharge of its annual report.
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