(Bloomberg) – Singapore's GIC PTE has increased its investment in the Americas while its holdings in the Asia-Pacific region have declined as the US is betting that the US will benefit most from the artificial intelligence boom.
North and South America account for 49% of GIC's assets as of March, from 44% in the previous year. Asia-Pacific assets fell from 28% to 24%, according to the fund's annual report released Friday. Europe, the Middle East and Africa remained the same at 20%.
The shift is because GIC expects a slowdown in the second half of the year, along with the increase and uncertainty driven by domestic and geopolitical pressures. The fund's five-year annual return rose to 6.1% on the nominal US dollar terms from 4.4% in the previous year. GIC does not publish annual performance figures.
“The power of change is clearly intensifying and it will be much more difficult to prepare,” said CEO Lim Chow Kiat. He added in a letter accompanying the report, “2025 could be a turning point in the market, and in history.”
GIC, which is estimated by consulting firm Global SWF, has assets under management of $847 billion, but aims to increase AI trading. Lim cited the impact of AI on the technology, particularly US companies, as a reason why some geographical holdings could change.
The company's AI investments in the US include Lamp, a financial operator in Atlan and New York.
“The US is a huge market and remains extremely innovative, and trends like AI will benefit the US most,” Lim said in an interview. “As long as the US allows us to deploy more capital, the proportion of other regions will be smaller.”
Despite the transition from Asia-Pacific, GIC still sees the opportunity. Brian Yeo, the group's chief investment officer, said the fund has expanded its Japanese investment team over the past year and continues to evaluate its Indian and Chinese transactions. GIC also locks its latest first public offering in Hong Kong as a cornerstone investor.
“Our basic case is really low growth and higher inflation on margin,” Yo added. “We have to overcome the higher ratings we see in India, which is why we are always thinking, “It's an opportunity for Indian pricing compared to the growth outlook.” ”
GIC has reduced the level of detail it makes public about its investments. Since the launch of its annual report in 2008, state-owned investors have not provided a percentage of the total holdings of a given country. They also did not provide details on how many of the portfolios are located in the developed VS Emerging Markets Equities, Private Equity, or Real Estate that were offered in the previous year.
Instead, all holdings were classified by labelling as stocks, bonds or actual assets. The GIC said these represent exposure to growth, revenue and inflation, respectively. This means that assets like gold can be placed in different categories depending on how they are used. Inflationary coalition bonds, which account for 7% of GIC's portfolio last year, sit within the actual asset category, along with assets, not bonds.
These new measures saw “subscription” rise from 46% in the previous year to 51% of assets, while “bonds” fell from 32% in the same period to 26%. “Actual assets” were almost flat at 23%. Within the stock, the fund has increased its investment in the US. The US continues to be its largest market due to capital expansion.
The decline in disclosures from companies that have not revealed the value of their assets has not revealed the value of their assets, as it strengthens scrutiny of foreign investors amid growing populism and national security concerns.
“It's utmost important to present information so you can get a good understanding of what a GIC portfolio looks like,” says Lim. “We believe we provide enough information to understand our stakeholders.”
More stories like this are available at bloomberg.com
