By Alvin Foo

THE Government of Singapore Investment Corporation (GIC) has done well in the timing of its stock market moves given the size of its portfolio, said fund managers and analysts yesterday.

GIC steadily sold some of its equities from July 2007 until the onset of the global financial crisis last September, thereby cutting its exposure to public equities by over 10 percentage points of its total portfolio and boosting its cash holdings.

The agency then began to buy back early this year the equities it had sold, and has since restored the equity proportion of its portfolio to pre-crisis levels.

Making these adjustments in such a short time was more demanding given the huge size of GIC's investments, valued at well over US$100 billion (S$141 billion) but estimated by analysts to be worth between US$200 billion and US$300 billion.

Mr Wong Kok Hoi, chief investment officer of APS Asset Management, said: 'Timing is always a tricky and tough thing. They got it right at their first attempt and saved themselves a few dollars.

'For their size, I guess they can do it only once every few years.'

Mr David Cohen, an economist at Action Economics, agreed: 'When you have a huge portfolio, it's much harder to make adjustments. It worked reasonably well - they moved in the right direction and avoided sharper losses.'

Mr David Lee, managing director of hedge fund Ferrell Asset Management, said GIC showed conviction and courage in investing its cash at a time when some were predicting a second Great Depression.

And CIMB-GK regional economist Song Seng Wun believed GIC's move reflected its conservative nature.

'With hindsight, the timing was good. The move was not a huge surprise given their conservative and defensive mindset.'

GIC chief investment officer Ng Kok Song admitted that the relatively large size of GIC's portfolio meant it had to act earlier than the average market operators, both in terms of buying and selling.

'We're like a super tanker. You cannot turn the super tanker around like you can do with a small boat,' he added.

In its annual report released yesterday, GIC reported that its portfolio slumped more than 20 per cent in Singapore dollar terms for the year ended March 31, but has since recovered more than half of last year's losses.

The loss dragged down its 20-year nominal annual rate of return in Singdollar terms from 5.8 per cent to 4.4 per cent. Its real rate of return - after accounting for global inflation - tumbled from 4.5 per cent to 2.6 per cent.

Fund managers said GIC's performance was creditable, particularly in relation to other organisations.

Mr Wong pointed out that most United States university endowment funds had a horrible year in 2008 with their large private equity, hedge fund and real estate holdings.

He added: 'GIC has adopted a more conservative strategy and hence has done relatively better.'

It is also thought to have outperformed the Abu Dhabi Investment Authority, viewed by some as a good benchmark for GIC's performance.

According to the United Nations' World Investment Report out this week, the Abu Dhabi fund's portfolio was estimated to have shrunk in size by 40 per cent between December 2007 and December last year.

GIC's losses appear similar in magnitude to Norway's sovereign wealth fund's, which reported negative returns of 23 per cent last year - the weakest in its history.

However, they have differing asset allocations. The Norway fund has about 60 per cent of its portfolio in equities with the rest in fixed income.

In contrast, GIC has 38 per cent of its portfolio in public equities, with 24 per cent in fixed income, 30 per cent in alternative instruments such as real estate and private equity, and 8 per cent in cash as of March 31.

This article was first published in The Straits Times.