SINGAPORE: Singapore multi-billion-dollar sovereign wealth fund GIC on Thursday reported a substantial dip in returns and warned of “difficult” global investment conditions over the next decade.

GIC said in a statement its annualised rate of return, excluding global inflation, for the past 20 years fell to 4.0 per cent in the year to March 2016, from 4.9pc in 2015, adding future returns will be challenged by uncertainties caused by the low-yield environment.

“These difficult investment conditions can stretch for the next 10 years,” said Lim Chow Kiat, deputy group president and chief investment officer.

“GIC is prepared for this protracted period of all-time low interest rates, modest global growth prospects and high valuations of financial assets,” he added.

In the face of a global slowdown, most central banks around the world — with the notable exception of the US Federal Reserve – have cut or are considering cutting borrowing costs as they look to ramp up inflation and kickstart their economies.

GIC, formerly known as the Government of Singapore Investment Corporation, manages Singapore’s foreign reserves with a focus on long-term performance.

Published in Dawn, July 29th, 2016