SINGAPORE - These uncertain times mean investors should ensure they have a range of options, including keeping some cash as "dry powder" for more immediate needs, said GIC chief executive Lim Chow Kiat on Thursday (Sept 19).
Mr Lim's remarks came as he outlined the Singapore sovereign wealth fund's strategy for what are challenging times.
The fund's annual report noted in July that it had adopted a more defensive stance amid slowing growth and uncertainties from trade tensions.
Its cash and bonds allocation stood at 39 per cent as at March 31 - the highest since its adopted its latest investment framework in 2013.
GIC is also expanding its networks of partners and investee companies, noted Mr Lim, who was speaking at the annual GIC Insights event, where global business leaders discuss issues pertinent to the business and investment community.
He told the event that investors are "hard put to find their footing" with the world at a turning point and the geopolitical mood souring amid rising populism and trade protectionism.
"They face rising uncertainty but falling returns," he added, noting that uncertainty over economic prospects is the highest on record now with policymakers also appearing to have limited ammunition to reflate economies.
"Faced with potential opportunity costs of missing out on positive returns, investors have also been moving into more risky assets," he said. "It is a quandary."
But there remain bright spots with breakthroughs in technologies such as artificial intelligence, 5G and blockchain creating new industries.
"This is also where we already find the middle ground, between technology and traditional companies," he said. "The convergence of their business models are producing many interesting investment opportunities."
Mr Lim added that GIC's investment strategy looks beyond economic cycles, capitalising on short-term dislocations.
This means that it also positions itself for longer-term trends such as the rise of the middle class in Asia, the innovation engine of the US and Europe's leadership in sustainability.
