Martin Lee @ Sg
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GIC Report 2010/2011

GIC has released their latest annual report giving us an idea of their performance of the government’s reserves.

In their press release, it was reported that the five, ten and twenty year annualized performances were 6.3%, 7.4% and 7.2% respectively.

However, note that all these figures are measured in USD terms. If measured in SGD terms, the numbers would be much, much lower.

I couldn’t find any mention of the SGD performance in the GIC report. To me, this is not good from a transparency point of view (That figure can be easily calculated by just finding out the annualized rate of depreciation of the USD versus the SGD in the same period).

As a Singaporean saving my money for retirement, I will want to know the returns of my savings in SGD terms, never mind the fact that I have been investing my savings in a globally diversified portfolio. Because that is the bottomline that will ultimately determine how much money I will have for retirement.

If I had held SGD at home in my biscuit tin can over the last twenty years, I would have been able to achieve a nice performance return if I choose to measure it in USD terms.

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Leave a Comment:

9 comments
sender says 12 years ago

Well, in life, things mostly become obvious on hindsight. But that’s not to excuse GIC’s so-so performance. Having said that, GIC investments are held widely with alot of it believed to be US Govt bonds guarantee to give low returns.

Well, Tony Tan was in-charge of GIC for past many years. He is now running for elected President; and if you think he steered GIC poorly, then you got to think whether you want him to be your elected President?

Reply
    Martin Lee says 12 years ago

    Sender,

    I always felt that the existence of two mega entities in the form of GIC and Temasek Holdings is unnecessary. I can understand having one but why do you need to have two when it adds another layer of costs?

    Reply
Norman Tsai says 12 years ago

Measured against the stable value of gold, GIC results are much much worse.

Paraphrasing:

“If I had held GOLD at home in my biscuit tin can over the last twenty years, I would have been able to achieve a nice performance return if I choose to measure it in USD or SGD terms.”

Cheers 🙂

Reply
    Martin Lee says 12 years ago

    Norman,

    Probably the government would have done better by using investing all their reserves into gold. Don’t need for all the staff at GIC and Temasek.

    Reply
TravelKid says 12 years ago

If GIC, (our govt’s investment arm, who hires the best financial brains) can muster only a “gross” annual retn of 7.0 (ave over 3 years, not taking into consideration inflation and foreign exchg gains) … Let those who has brains think. Humm…

Reply
Jason Kwok says 12 years ago

The next time when USD strengthen, just assume it would, then GIC performance will measure in Ringgit…..:-)

Forget it! We need to transparency and good governance of our people money and asset.

This bring up the issue of coming presidency election. Do we still want to elect another former member from the ruling party or we want a neutral candidates like Tan Kin Lian or Dr Tan Cheng Bock. Coincidentally, all candidates are from the TAN families.

Personally, would consider voting for either Mr Tan Kin Lian or Dr Tan Cheng Bock. Hope we would have a president like our most beloved former president, Mr Ong Teng Cheong, who dare to question and challenge the ruling party.

Reply
    Martin Lee says 12 years ago

    Jason,

    I think we have to see who even gets the COE to run in the first place.

    Reply
Nuts says 12 years ago

Over last 10 yrs, USD depreciated against SGD by -3.9% p.a.

Over 5 yrs, it is -5.35% p.a.

So actual returns in SGD terms are roughly similar to wholelife and endowments. You can now tell people that your insurance company as good as GIC. Hiaks hiaks!

You can also see that pace of depreciation started in recent years, especially from 2008 with the “money printing”. MAS is also guilty of this, but to much lesser extent than US.

Reply
    Martin Lee says 12 years ago

    Dear Nuts,

    I think if you factor in inflation, the real return would be close to 0% or even negative. 🙂

    Reply
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