GIC has sustained steady long-term investment returns on the foreign reserves of the Singapore Government that we manage. The GIC Portfolio’s 20-year annualised real rate of return for the year ended 31 March 2016 was 4.0%, compared to 4.9% for the previous year. In USD nominal terms, the GIC Portfolio generated an annualised return of 5.7% over the same 20 years. GIC accepts no liability whatsoever for your actions or the actions of third parties in relation to your use of or re-distribution of these slides. Images herein may depict objects or elements that are protected by third-party copyright, trademarks and other intellectual property rights. © GIC 2016. All rights reserved.

2. Primary Performance Metric
• Primary metric to evaluate investment performance is the rolling 20-year real rate
of return for our total portfolio
• Reflects our mandate to preserve and enhance the international purchasing
power of the reserves placed under our management over the long term
Assessed by our long-term performance on a total portfolio
basis

3. Executive Summary
• Steady long-term returns on Singapore’s foreign reserves over 20 years
• Expect the real returns for the GIC Portfolio to be lower going forward due
to protracted period of all-time low interest rates, modest global growth
prospects and high valuations of financial assets.
• Investment framework and approach remain sound in the low-yield
environment
• Continue to source attractive bottom-up investment opportunities by taking
advantage of our long-term horizon, skills and global reach

4. Annualised real rate of return was 4.0% per year, over 20 years ending
31 March 2016
Steady Long-Term Performance
4.0% real return
per year over 20 years

5. Steady Long-Term Performance
To generate good real returns over the long term, we have to be prepared for
short-term unrealised losses or underperformance relative to the market indices, at
times for several years at a stretch
*For period ended 31 March 2016

6. Investing in a mix of growth and defensive assets
Asset Mix

7. Broad geographical diversification
Portfolio Composition

8. Represents actual
exposures of
GIC portfolio
Within risk limits set by the
Client
Investment framework and approach remain sound.
3 areas that we have been implementing and preparing for a low-yield
environment:
Investing in a low-yield environment
Beta
(Asset Allocation)
Alpha
(Active Management)
Omega
(Implementation)
Overall robustness Idiosyncratic
opportunities Portfolio costs
• Key driver of returns
over the long term
• Resilient under
different scenarios
and yet allows
earning of long-term
risk premiums
• Continue to explore
and adopt new
portfolio construction
approaches
+ =
• Additional source of
return and
diversification for
total portfolio
• “Bottom-up”
investments,
including external
manager mandates
• Diversified across
many active
strategies
Total Portfolio
• Represents
actual
exposures of
GIC portfolio
• Within risk
limits set by
the Client
+
• Includes transaction
costs such as broker
commissions,
external manager
fees, bid-ask
spreads, market
impacts, etc.
• Cost savings are
direct additions to
our portfolio return

9. Variability in long-term returns
Investing in a low-yield environment
20-Year Rolling Real Return of a US 65% stocks/35% bonds Portfolio from 1900 to 2015

10. Starting yields correlated with subsequent future returns
Investing in a low-yield environment

11. Connect with us on:
Find out more at
www.gic.com.sg