Government of Singapore Investment Corp., which manages more than $100 billion, will be able to more quickly adjust the makeup of its assets and will focus on emerging markets as they outpace developed economies.
The fund, with the approval of the board, will be free to change its asset allocation over the medium term, or within five years, to “respond more flexibly to significant risks or opportunities,” Chief Investment Officer Ng Kok Song said in the annual report Sunday.
GIC said it will continue to increase its investments in higher-growth emerging economies, especially in Asia, as expansion in developed nations slows. Its holdings in the U.S. fell to 36% of its portfolio in the year ended March 31 from 38% the previous year, according to the annual report.
Annual returns in the past 20 years averaged 7.1% in U.S. dollar terms, compared with 5.7% in the previous fiscal year. The rate of return in excess of global inflation rose to 3.8% from 2.6%. GIC didn’t give the value of its assets or how much they rose or fell.
“While the global economy is experiencing a rebound, the recovery path beyond this year is subject to significant uncertainties,” GIC Deputy Chairman Tony Tan said in the report. “The financial landscape has become more volatile, with more uncertainty and tail risk.”
GIC’s holdings of developed markets equities rose to 41% of its portfolio as of March 31 from 28% a year earlier, it said. The fund repurchased shares of companies in developed markets starting in early 2009, after selling them from July 2007 to September 2008 because it was concerned about the overvaluation of risk assets, according to the report.
Its allocation to alternative investments — including real estate, private equity, infrastructure and natural resources — fell to 25% from 30%.
Investments in fixed income and cash fell to 24% from 32% as funds were used for the purchase of equities, according to the report.