SINGAPORE - The Government of Singapore Investment Corp. (GIC) reported losses of 20% on its investments today for the year ended March 31, but said it has since recovered half of the year's losses on the back of rising equity markets.
The sovereign wealth fund said the results pulled down the 20-year rate of return in local currency to 4.4% from 5.8%.
Chief investment officer Ng Kok Song said the scheme had moved to de-risk in the year leading up to March.
He wrote: "The main development was the temporary reduction in public equities arising from our concern about equity overvaluation in the euphoric market environment of early 2007. We had reduced public equities by more than 10% over the period July 2007 to September 2008.
"This precautionary strategy helped the portfolio to avoid a larger loss in the ensuing bear market."
Song said they reversed their posture early this year.
He said: "Aggressive fiscal stimuli by governments and significant monetary easing by central banks had averted a scenario of economic depression, and stock markets were generally fairly priced."
As of March, the wealth fund invested 38% in public equities, 24% in fixed income, 30% in alternatives and 8% in cash. The scheme does not release its assets under management.
Last week, the GIC said it had secured a US$1.6bn gain in its investment in troubled bank Citigroup. (Global Pensions; September 23, 2009)
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