Singapore’s GIC Pte Ltd is increasing its investments in emerging economies. It believes that growth rates there will outpace those of developed markets. The GIC is more positive about emerging markets due to growing middle classes, valuations and the progress of reforms.
GIC Chief Investment Officer Lim Chow Kiat said that “emerging markets have their own challenges, but we find that the valuation is not the hurdle.” He warned about elevated prices in developed markets. Lim said the state fund favors countries including China, India, Indonesia and Mexico. He declined to elaborate on specific holdings
The GIC’s 20-year annualised rate of return (increases on top of global inflation) stood at 4.1 percent as of March 31 2014. The same time last year, it stood at 4 percent. GIC Pte Ltd manages of more than $100 billion of Singapore’s reserves.