Before 2010, GIC had disclosed annual returns in Singapore dollar. (GIC reports, see pg 10)
In 2010, GIC decided to change its reporting currency from S$ to US$.
There was no reason to change the reporting currency because all returns would eventually have to be converted to S$. And Singaporeans have the right to know GIC’s actual performance.
As can be seen from the chart above, returns in US$ are higher than in S$ because the local currency has appreciated against almost every currency for decades.
Since GIC is invested in only overseas assets, its returns are much lower after conversion to local currency.
Although an idiot would have already been aware that GIC was concealing its very, very mediocre performance, then MOF MOS Josephine Teo still tried to pull a fast one:
Question for confused Jo:
Why doesn’t Temasek avoid confusion by reporting in US$?
GIC could have disclosed its returns in both US$ and S$. The reason why it doesn’t should be obvious to thinking Singaporeans by now.
Anyone who has been following this issue closely would have known that GIC has already acknowledged its poor performance, especially during the last decade.
“That’s because the high returns at the beginning of the period – the late 1990s – have dropped out of the 20-year window.”
GIC’s estimated 20-year 4% nominal return in S$ last year is in fact very poor performance, considering the risks our CPF (loaned to GIC) is subjected to.
For example, exchange rate risk would have wiped out 36% for a UK investment, 50% for an Indian investment and 55% if invested in Indonesian assets 20 years ago.
Possibly, massive exchange rate losses are preventing PAP from returning CPF members our retirement savings, as promised, at 55.