GIC posts 20-year annualised real return rate of 3.8% in 2025, trials AI virtual investment committee member

Singapore's sovereign wealth fund GIC has recorded a 3.8 per cent annualised real rate of return over a 20-year period ending Mar. 31, 2025, after adjustment for global inflation, a five-year low.

This means that the GIC Portfolio beat global inflation by 3.8 per cent per year.

The numbers continue a recent decrease in rolling return rates, down from 4.6 per cent in 2023 and 3.9 per cent in 2024.

The annualised USD nominal rate of return over the same 20-year period was 5.7 per cent.

GIC uses a rolling 20-year real return rate as the primary metric for evaluating its investment performance, in accordance with its mandate to preserve and enhance the international purchasing power of reserves over the long term.

Here is a visual of how this average time-weighted portfolio return is calculated from year to year:

Uncertainty in the world

GIC says that constant changes in the world today have made it much harder to prepare for the unprecedented uncertainty.

"Investors today are facing a world in flux. The cyclical, structural, and foundational shifts that we have been observing have intensified,” said Lim Chow Kiat, GIC's Chief Executive Officer (CEO).

Cyclically, Lim said that volatile growth and inflation will lead to a "wider cone of outcomes".

Structural shifts, like global supply chain reconfigurations, are long term shifts that can be prepared for, and which will impact capital flows, productivity and projected long term returns, he also said.

Foundational shifts, on the other hand, are "multi-year, possibly even multi-decade kinds of scenarios", added Group Chief Investment Officer Bryan Yeo.

Climate change and AI are two such long-term shifts, he said, alongside power conflicts, increased protectionism and de-globalisation forces in the world.

As for their impacts on the investment market, Yeo said GIC is expecting returns to be more volatile in the next decade, and there could be lower compensation for taking additional market risks.

Targeted investment

To face the changing environment, GIC said it aims to focus on long-term value by diversifying across asset classes, geographies, sectors and time to deliver favourable real long-term returns across a range of scenarios.

Lim also said that GIC will employ granularity, which means "taking a targeted investment approach" by breaking down bigger themes into different opportunistic segments.

They also aim to be agile, he added, specifically by preserving liquidity and maintaining flexibility.

Investing in AI

GIC expanded upon its AI capabilities in 2023 with the establishment of an AI Council, in order to increase operational efficiency and enhance investment decision-making.

A key project highlighted was the prototype of a virtual investment committee member, which is able to generate probing questions, challenge assumptions and surface contrarian insights in real time.

The tool taps on GIC's institutional knowledge to function, Lim said, and has been deployed in GIC's Fixed Income and Multi Asset department.

It is currently a work in progress, "an experiment", and refines its approach with each use, he emphasised.

Lim notes that one thing that they have to be careful about is "hallucination", where large language models, designed to please the user, might end up fabricating stuff which may not actually exist.

Globally, GIC said it has also contributed to the growth of AI capabilities by providing long-term capital for companies to improve on their AI capabilities.

In 2023 and 2025, they organised Bridge Forums to discuss the adoption of AI among a panel of investors and global business leaders.

"Now that we have laid the foundations for good data, tools, and governance, we are accelerating the adoption of AI across the organisation. The more our employees use AI, the more familiar they become with its benefits and constraints," Lim said.

Top image via GIC