GIC says portfolio recovers after slump in '08/'09

SINGAPORE, Sept 29 (Reuters) - Singapore's giant sovereign wealth fund GIC said on Tuesday its assets fell over 20 percent in Singapore dollar terms in the year to March 2009, but has since recovered over half the losses as markets rallied.

The weak 2008/2009 performance pushed GIC's average nominal returns in dollar terms for the 20 years to March 31 down to 5.7 percent, from 7.8 percent a year ago. Its nominal return over 20 years in Singapore dollar terms was 4.4 percent versus 5.8 percent a year earlier.

The Government of Singapore Investment Corp, or GIC, the larger of Singapore's two wealth funds with an estimated $200 billion or more in assets, cut its equity holdings but raised exposure to the United States and alternative investments.

Its investment in UBS (UBSN.VX)(UBS.N) was still showing a loss, it said in its second annual report.

"Like many large institutional investors, GIC's portfolio had been impacted in the severe global downturn of 2008," Deputy Chairman and Executive Director Tony Tan said in a statement.

"In recent months, we had recovered a good part of our losses as the markets performed better," he added.

Looking ahead, the Singapore fund said it was cautious about bonds but optimistic about emerging markets and Asia.

GIC is the world's fourth largest sovereign fund after the sovereign funds of Abu Dhabi, Saudi Arabia and Norway, according to Deutsche Bank. (Reporting by Kevin Lim; Editing by Neil Chatterjee)