SINGAPORE: The sovereign wealth fund GIC reported lower returns for the most recent fiscal year and issued a warning, stating that returns will likely be negatively impacted by “profound uncertainty” as we advance. However, it declared that despite the volatility, it would play to its advantage and take advantage of fresh opportunities, like investing in the climate transition.
GIC stated in its 2023/2024 annual report, which was made public on Wednesday, July 24, that its 20-year annualized real rate of return for the year that concluded on March 31 was 3.9%. The reported 4.6% return from the previous year was the highest since 2015. This was a decrease from that amount.
The average annual return of GIC’s portfolio from April 2004 to March 2024, adjusted for global inflation, is shown in the figure for FY2023/24. The robust performance from April 2003 to March 2004, when equity markets recovered from the severe correction of the dot-com crisis, was not included in the rolling window for this year’s 20-year return, as GIC pointed out in its report.
Despite monetary policy tightening the year before, the global economy proved resilient in 2023, and firm performance in risk assets was driven by a slowdown in inflation, according to GIC. An increased interest in generative artificial intelligence also contributed to higher tech sector returns.
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