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The Government of Singapore Investment Corp (GIC) said on Monday it will increase its investments in emerging markets after a strong performance in 2009/2010 when it offset losses incurred in the previous year.
GIC, which manages in excess of US$200 billion ($264.4 billion) according to most analysts’ estimates, said in a report for the year ended March 2010 its average annual return over the past 20 years rose to 7.1% in dollar terms, from 5.7% a year ago.
The Singapore sovereign fund’s real rate of return, or the return in excess of global inflation, was 3.8% per annum over the past two decades, an improvement over the 2.6% per annum reported for the 20 years ending March 2009.
GIC said the increase in the value of its portfolio over the course of 2009/2010 “largely offset the loss in the previous year”.
“GIC started to selectively take on more risk from the second quarter of 2009, amidst growing confidence in the economic recovery,” Deputy Chairman and Executive Director Tony Tan said in a statement.
“GIC will continue to increase its investments in the emerging economies, especially in Asia,” he added.
During the 12 months ended March 2010, GIC increased its investment in equities to 51% of its portfolio from 38% at end-March 2009, while the proportion held in bonds fell to 20% from 24% a year ago.
“The increase from 28% to 41% in developed marekt equities reflected the repurchase of equities as well as the improved valuation arising from the rebound in stock markets in 2009,” the Singapore sovereign investor said.
GIC’s holdings in alternative investments, which includes real estate, infrastructure and natural resources, fell to 25% after jumping sharply to 30% last year.
The geographical distribution of GIC’s portfolio was little changed from March 2009 with the United States accounting for 36% of its portfolio, down from 38%, and Europe rising to 30% from 29%.
Asia including Japan accounted for 24% of GIC’s portfolio at end-March 2010, unchanged from a year ago.
GIC, unlike smaller sister fund Temasek (TEM.UL), does not disclose how much it manages or list its key holdings.
GIC did not disclose its average returns in Singapore dollar terms in its latest annual report unlike in previous years.
