Investment Report

For the 20-year period that ended on 31 March 2026, the annualised US$ nominal return of our portfolio was 0.0%. After adjusting for global inflation, the annualised 20-year real return was 0.0% (see Box 1 on the effects of global inflation and Box 2 for more detail on the mechanics behind the calculation of the rolling 20-year return). This long-term real rate of return was in line with our mandate to preserve and enhance the international purchasing power of the reserves placed under our management.

While the primary metric for tracking the GIC Portfolio’s investment performance is the rolling 20-year return above global inflation, we also monitor intermediate indicators of our ongoing investment performance.

Table 1 presents the nominal (i.e., not inflation-adjusted) US$ returns over the 10- and 5-year periods, along with corresponding portfolio volatility. The 20-year nominal numbers are included for completeness.

Over the 20-, 10-, and 5-year periods, the GIC Portfolio returned 0.0%, 0.0%, and 0.0% in nominal US$ terms, respectively.

The investment environment over the past decade saw two distinct phases—before and after the COVID-19 pandemic. The earlier phase was characterised by near-zero interest rates, stable inflation, and low market volatility. In contrast, the post-pandemic period saw wide differences in performance across asset classes, driven by four interrelated forces: the pandemic; geopolitical realignment; resurgent inflation and tightening monetary policy; and rapid technological transformation.

• The pandemic catalysing market volatility: The pandemic triggered extraordinary market volatility, causing sharp declines in equities. Supportive monetary and fiscal measures subsequently helped markets recover, though the pace differed across regions and sectors. Most developed economies benefited from stronger and faster fiscal support, enabling those markets to recover more rapidly than emerging markets.​

• Geopolitical realignment reshaping investment dynamics: Geopolitical realignment is a defining feature of the current global landscape. Conflicts such as the Russia–Ukraine war and, more recently, the wars in the Middle East have deepened global fragmentation. The pandemic had exposed vulnerabilities in global supply chains, and these conflicts further strained energy, agricultural, and shipping routes, prompting nations to reassess strategic dependencies in areas such as energy, technology, and logistics. Renewed uncertainty around United States (US) trade tariffs, rising protectionism, and intensifying competition for economic and technological advantage further underscore a fractured and evolving global order. These developments have reinforced the trend towards regionalisation and reshaped global investment dynamics.

• Resurgent inflation and tighter monetary policy raising the cost of capital: Post-pandemic supply disruptions due to geopolitical events, compounded by lingering effects of the pandemic, increased market uncertainty and fuelled global inflation. In response, central banks tightened monetary policy, raising interest rates and the cost of capital. This depressed asset valuations, particularly for fixed income. As inflation later moderated in several economies, some central banks began cautious rate cuts, while others maintained higher rates. These divergent policy paths reflected differing inflation outlooks, creating uneven valuation pressures across regions, hence reinforcing the need for a more disciplined, selective investment approach.​​

• The artificial intelligence (AI) revolution transforming industries and business models: Rapid technological transformation is powerfully reshaping markets and economies. AI saw rapid progress from chatbot to reasoning to agentic capabilities, catalysing innovation and supporting strong nominal growth in developed market equities, particularly in the US. While AI will continue to redefine productivity and business models, the sustainability of the AI rally is uncertain. The risks include AI circular financing, energy constraints, and elevated or uneven valuations.

These shifts—from the moderate-growth mid-2010s to the post-pandemic rebound and subsequent volatility—have shaped portfolio returns. For the 10-year period, the post-pandemic recovery from mid-2020 to 2021 boosted equity returns, contributing to our higher returns. In contrast, returns over the 5-year period were lower as persistent inflation, a sharp rise in interest rates, heightened market volatility, and geopolitical tensions weighed on market performance. While advances in AI supported certain sectors, such as technology and semiconductors, gains remained uneven across industries and geographies.

​Over the past few years, we increased portfolio resilience through diversification and a lower-risk profile. In the event, this lowered overall returns. Recognising the need to balance resilience with returns, we continued to look out for structural opportunities to invest in. In the AI space, we invested selectively in areas or companies that we believe have enduring value beyond short-term market enthusiasm. To enhance inflation resilience, we increased allocations to real assets such as commodities, gold, and infrastructure. We remained focused on building long-term value to keep the portfolio stable and resilient.

We present the GIC Portfolio in three broad asset groups: Equities, Fixed Income, and Real Assets. This grouping covers our holdings across both public and private markets and captures our exposure to the key factors of growth, income, and inflation, respectively.

In the year that ended on 31 March 2026, the share of equities increased, while the share of fixed income correspondingly decreased. Within equities, we increased investments in the US, which remains GIC’s largest investment market. The share of real assets remained stable over the year.

While we do not allocate our assets by geography, we monitor our exposures across regions. The geographical distribution of the GIC Portfolio reflects the results of our asset allocation strategy and bottom-up opportunities sourced by our investment teams worldwide.

From 2026, we will be adapting our investment framework to ensure the GIC Portfolio remains well positioned amid the evolving landscape (see Box 3). Our focus remains firmly on meeting our mandate to preserve and enhance the international purchasing power of the reserves placed under our management.

The global investment landscape is being reshaped by foundational shifts. Just in the past year, we have seen major changes to the global trading architecture that has underpinned economic growth for decades. Some major economies are making fundamental changes to how they manage public finances and regional armed conflicts that are threatening global energy supply. At the same time, rapid advancements in AI and related technologies are transforming almost every industry and raising fundamental questions about human capital. Each of these developments creates both opportunities and risks for investors. As the range of outcomes widens, it is more important than ever for investors to: carefully assess key risk-return assumptions for each asset; construct diversified, well-balanced portfolios that can deliver good real returns across a broad range of scenarios; and be agile in a fast-changing investment environment.

​We believe three major forces will shape the investment landscape over the medium term: the changing world order, rising fiscal risks, and advancements in AI.

• The Changing World Order: The post-war, rules-based international order that supported globalisation and cross-border capital flows is giving way to a multipolar world where power is exercised through economic leverage, strategic coercion, and sometimes outright force. The US and China are increasingly operating within separate and competing spheres of influence such as trade, technology, and security alliances. Global economic policy has become less predictable—sweeping tariff actions and shifting alliances have introduced a level of regime uncertainty unseen in decades. Trade is increasingly viewed as a zero-sum game, with protectionism, industrial policy, and export controls replacing the prior consensus around comparative advantage, open markets, and international division of labour. Geopolitical risks have become structural features of the investment landscape rather than temporary disruptions.

• Rising Fiscal Risks: Across major economies, public debt levels are at historic highs, eroding the credibility of governments to prudently manage their finances. While there is no imminent sovereign crisis in developed markets, the margin of safety is narrowing. For example, in the US, interest costs now rival defence spending, primary fiscal deficits show no signs of improving, and political appetite for meaningful fiscal consolidation is absent. The challenge is compounded by intensifying global competition for savings, which pushes up long-term yields and forces governments to rely more on short-term debt issuance. Deteriorating fiscal positions also reduce the capacity for counter-cyclical stimulus in future downturns. For investors, this calls for careful duration management and a reassessment of the role of sovereign bonds as risk diversifiers.

• Advancements in AI: Rapid advancements in AI have triggered an investment race among companies and nations to build data centres, establish semiconductor fabrication capacity, and enhance AI models at an unprecedented pace. AI is transformative and will increase productivity, potentially reshaping labour markets and competitive dynamics across every sector. Although we firmly believe the long-term trend is upward, progress will be uneven and periodic slowdowns in AI-related investment spending are possible. These rapid advancements have also heightened disruption risks across industries (e.g., software and business services). Business models that depend on routine cognitive tasks, legacy software moats, or information asymmetries are being challenged at an accelerating rate. For investors, this means investing with greater granularity as there would be a wider gap between companies that harness AI effectively and those displaced by it.

These three forces have several implications for the investment landscape over the medium term.

• ​First, governments are intervening more actively to promote self-sufficiency and resilience, particularly in sectors such as semiconductors, emerging technologies, rare earths, critical minerals, and defence. Industrial policy, protectionism, and defence spending have become central themes for policymakers globally. This is occurring even as fiscal conditions have become increasingly stretched across developed and emerging markets, including the US, Japan, Europe, China, South Korea, and Brazil. We expect inflation to rise as resilience and redundancy often reduces efficiency and raises costs. Geopolitical flare-ups may further disrupt trade routes and critical supplies. For investors, higher inflation tends to increase bond-equity correlation, affecting the role of government bonds as risk diversifiers.

• Second, decades of US market outperformance have expanded its share of global capital markets. However, unpredictable US policies, rising fiscal risks, and chronic geopolitical tensions are increasingly challenging US exceptionalism. The challenge for investors is that few markets offer comparable depth and liquidity as the US.

• Third, while AI promises large productivity gains, the path to those gains will be uneven. Investors are reassessing long-term valuations across industries. Some sectors, such as software, are now expected to have lower terminal values compared to asset-heavy sectors that face less risk of technological obsolescence. In the near term, heavy investment in AI is likely to drive higher growth and inflation as countries compete. Over time, as productivity gains from AI diffuse across economies and industries, these inflationary pressures could give way to deflation.​

We therefore expect asset returns to vary widely across different growth and inflation environments. This landscape will reward careful underwriting of individual return streams, deliberate risk-taking, disciplined rebalancing, and selective capital deployment. At the same time, persistent inflation and fiscal uncertainty may make bonds a less reliable hedge against risk assets. Here is how our investment teams are navigating this rapidly changing environment.

​Over the past decade, GIC has steadily strengthened its investment and asset management capabilities to navigate an increasingly complex and dynamic global environment. Across public and private markets, our teams combine deep research, disciplined deal-making, and active ownership to build a resilient portfolio of high-quality assets. We aim not only to buy well but also manage well and ultimately, sell well. This will create long-term value through rigorous risk management, integration of sustainability and technology, and operational excellence. These capabilities enable GIC to deliver good, long-term real returns and safeguard Singapore’s reserves for future generations.