Singaporean sovereign wealth fund GIC Pte warned that investors are being too complacent about looming market risks, while disclosing that its main performance gauge fell for the second straight year.
“We are cautious because valuations are stretched, policy uncertainty is high and there are still unresolved economic imbalances,” Lim Chow Kiat, GIC’s chief executive officer, said in an interview in the city. The "uncertainty level is very high," in contrast to "very low" actual equity price volatility, he said. "We think this indicates investor complacency, another reason for us to be more cautious."
GIC’s annualized real rate of return fell to 3.7 percent in the 20 years to March 31, from 4 percent in the prior comparable period, Lim said in the interview ahead of the Monday release of the numbers. The decline partly reflects the fact that the calculation now excludes the year through March 1997, when rallying markets boosted returns. The fund’s nominal five-year annualized return in U.S. dollars climbed to 5.1 percent from 3.7 percent.
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“We are cautious because valuations are stretched, policy uncertainty is high and there are still unresolved economic imbalances,” Lim Chow Kiat, GIC’s chief executive officer, said in an interview in the city. The "uncertainty level is very high," in contrast to "very low" actual equity price volatility, he said. "We think this indicates investor complacency, another reason for us to be more cautious."
GIC’s annualized real rate of return fell to 3.7 percent in the 20 years to March 31, from 4 percent in the prior comparable period, Lim said in the interview ahead of the Monday release of the numbers. The decline partly reflects the fact that the calculation now excludes the year through March 1997, when rallying markets boosted returns. The fund’s nominal five-year annualized return in U.S. dollars climbed to 5.1 percent from 3.7 percent.
More at GIC Warns Investors Aren't Fearful Enough
