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GIC’s 20-year annualised real return falls to 3.4%, lowest in 6 years
🇸🇬 Singapore /Economy & Trade

GIC’s 20-year annualised real return falls to 3.4%, lowest in 6 years

From CNA · () English

Summarized and contextualized by DistantNews.

At a glance

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  • Singapore's sovereign wealth fund GIC reported its 20-year annualized real return fell to 3.4% in FY2025/2026, the lowest in six years, due to prioritizing resilience amid global uncertainty.
  • GIC plans to refresh its investment framework for greater flexibility and is focusing on Artificial Intelligence (AI) as a key investment area.
  • The fund intends to deploy an additional US$30 billion into hedge funds over the next three years and is strategically investing in AI enablers, monetizers, and adopters.

Singapore's sovereign wealth fund GIC saw its 20-year annualized real rate of return drop to 3.4 percent in the fiscal year 2025/2026, marking a six-year low. This decline, the third consecutive year of decrease, reflects GIC's strategic shift towards prioritizing resilience and diversification amid what CEO Lim Chow Kiat described as "profound uncertainty" in the global landscape.

In response to a "fundamentally changed" world, GIC announced it will update its investment framework to enhance flexibility. The fund aims to navigate tightening constraints and widening outcomes by taking less risk, a move that moderated returns but provided greater downside protection and opportunities. GIC manages Singapore's reserves, contributing to the national budget by preserving and enhancing the purchasing power of these assets.

This moderated returns, but it is consistent with our long-term mandate: it gave us greater downside protection and more flexibility to act on opportunities as they emerge.

— Lim Chow KiatCEO of GIC, explaining the rationale behind prioritizing resilience and taking less risk.

Looking ahead, GIC identifies Artificial Intelligence (AI) as a critical investment focus. The fund plans to allocate an additional US$30 billion to hedge funds over the next three years, building on a decade of tripled investments in the sector. Group Chief Investment Officer Bryan Yeo noted the increasing complexity of the AI ecosystem, making it challenging to identify long-term winners. GIC's strategy involves investing across AI enablers, monetizers, and adopters, with a current focus shifting towards adopters for future value creation.

When evaluating companies within the AI space, GIC considers structural advantages, leadership, and business momentum, while closely monitoring risks such as overregulation, stretched valuations, and technological bottlenecks. The fund aggregates its investments to manage its overall exposure to the rapidly evolving AI market.

We think that in the coming few years, there will be a lot of value creation in the adopters space.

— Bryan YeoGroup Chief Investment Officer of GIC, discussing the future investment focus within the AI sector.
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Originally published by CNA. Summarized and contextualized by our editorial team with added local perspective. Read our editorial standards.

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