The main investment return indicator of Singapore's sovereign wealth fund, GIC, has shown the weakest growth in four years and stated that high interest rates, economic difficulties in China, and geopolitical tensions will make the investment environment challenging.
GIC announced on Wednesday that its 20-year annualized real return was 3.9%, down from 4.6% last year. This growth rate is the slowest since the 2.7% investment return in 2020.
According to estimates by the Sovereign Wealth Fund Institute, GIC manages $770 billion in assets and is one of the three major institutions managing Singapore's reserves.
GIC attributed the decline in returns over the latest 20-year period to the exclusion of the fiscal year 2004, when the stock market experienced an unusual rebound after the bursting of the internet bubble.
GIC stated, "That year stands in stark contrast to recent years due to the weak returns from fixed income and global equities, especially in emerging markets."
GIC does not disclose its one-year results or the value of the assets it manages.
In its investment report, GIC noted that higher long-term interest rates, macroeconomic challenges related to China's real estate market, and escalating geopolitical tensions will constrain investment returns.
The company stated, "Additionally, the valuation of many risk assets, particularly in developed markets, remains high, making the medium-term return outlook still low and the risk-return less favorable."
