Why I do not trust GIC to invest my hard-earned CPF retirement savings

Like PAP, GIC does not believe in good governance. Instead of focusing on managing CPF funds, it focuses on disclosing immaterial information and engaging in all sorts of propaganda to hoodwink gullible CPF members. 😦

For example, GIC own self claims the annualized 20-year real rate of return is the primary metric to evaluate its investment performance. However, no other fund manager has done likewise because they would have been history.

The 20-year real rate of return actually tells us nothing about current performance of GIC but its performance 20 years ago. For example, if GIC made a 20-year 3% real rate of return, it means an investment made 20 years ago has beaten inflation by 3% annually.

To confirm, GIC uses this example in its annual report: “In nominal USD terms, the portfolio generated an annualised return of 5.7% over the 20 years that ended 31 March 2016. This means that US$100 invested with GIC in 1996 would have grown to US$303 today.”

Similarly, a 10-year 4% nominal rate of return means an investment made 10 years ago has earned 4% annual compounded returns.

When GIC discloses 5-, 10- and 20-year rates of return, it is telling us about its past performance 5, 10 and 20 years ago. Of what use is this to CPF members?

GIC’s selective disclosure keeps changing and it is clearly trying to conceal material information about its real performance. For example:

In an earlier post, I highlighted GIC has concealed its cash position by commingling with bonds; cash earns next to nothing returns. GIC appears to have increased its cash position in anticipation of a market correction which did not materialize.

GIC could have been as upfront as NBIM, manager of Norway’s reserves, which is about 3 times the size of GIC’s, ie NBIM has even disclosed a breakdown of the types of bond investment.
Instead of being as transparent, GIC commingles and conceals ‘cash’ with its bond holdings to avoid public scrutiny.

Does any public listed GLC conceal its cash in such a manner?

With regard to senior management remuneration, NBIM has disclosed this in its AR (below). As for GIC, such information has been state secret since inception. 😦
NBIM is not pai seh to disclose its total management costs, including external manager, amounted to 3.7 billion kroner/S$644 million in 2016. Why does GIC see any need to conceal similar information from CPF members?  Are CPF members being shortchanged because GIC has been paying themselves billions in management costs every year?

With AUM of S$1.35 trillion (image below), senior management of NBIM collectively earned less than S$12 million. How much is paid to GIC’s senior management for managing a die-die-cannot-tell AUM, estimated to be about only 1/3 of GPFG’s?
Isn’t it also strange that NBIM could be totally upfront on its annual performance but GIC can’t do so?
CPF members are not dumbasses and understand perfectly the risks associated with investment. Nobody will blame GIC for the bad years but it should not engage in propaganda and continue to take us for a ride. 😦

When GPFG’s AUM fell during the GFC – as did every SWF’s – Norwegians did not kpkb online but trusted their reserves were in good hands. This is because their government had been totally transparent.

Here in Singapore, it is only natural for thinking citizens to kpkb and press for transparency because the PAP has been concealing material information since 1981. Did PAP also conceal huge losses in GIC?  How are CPF members assured of this without transparency?

If GIC could be as transparent as GPFG, CPF members would not have to speculate.

PAP should stop offering self-insulting reasons to conceal material information, eg our currency will kena hantam by speculators during a financial crisis.  If the Singapore dollar is inherently strong, why would speculators mount an attack on a strong currency?

Has Norway’s currency been attacked since years ago for having a totally-transparent SWF, eg discloses its yearly returns?
GIC seems to be unproductive and overpaid: while GPFG is about triple the size of GIC, it has half the number of employees. Does GIC also employ many former civil servants or military personnel?

There are so many things going wrong at GIC and its credibility will continue to go down the toilet bowl if it insists on engaging in propaganda in the internet age.

There are too many reasons why I do not trust GIC with my CPF but that will be for another post. 😦

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