GIC 5.1, Temasek 16, Fund Manager 12%?


If most fund managers in Singapore have been able to consistently give 12 per cent per annum returns as what it states in the advertisement, most investors can outlive their money and leave an estate for their beloved ones.

I refer to the article “Assets under management in S’pore up 7% to $2.7 trillion” (Straits Times, Sep 27).

It states that “Sustained net fund inflows and broad-based improvements in market valuations supported the growth, it added.

“Compliance requirements are still very onerous and that sets the bar very high for new entrants, but in a small country like Singapore (with) limited scope for local investments, you end up with a mismatch of big pools of capital and small targets””.

On the same day (27 September) in the Straits Times – there is an over half-page advertisement “The Mathematics of How Money Grows” – A basket of value stocks @ 10 -12% p.a. – Hard Facts – Every $200,000 will grow to $800,000 in 12 years’ time at 12% compounded yearly.

$800,000 will give you $40,000 yearly retirement income @ 5% withdrawal rate.

That will be $3,333 a month of lifetime income

You will not outlive your money and you can still leave an estate for your loved ones.”

In this connection, GIC’s latest 20 years’ and Temasek’s “from inception” annualised returns are 5.1 per cent (in US$ terms – lower if in S$ terms) and 16 per cent (in S$ terms), respectively.

The highest return ever publicly disclosed by the GIC was 8.2 per cent (in S$ terms) for the 25 years from the GIC’s inception in 1981 till 2006.

So, how many fund managers in Singapore have been able to consistently give 12 per cent per annum returns, as described in the advertisement?

Leong Sze Hian

About the Author

Leong Sze Hian has served as president of 4 professional bodies, honorary consul of 2 countries, an alumnus of Harvard University, authored 4 books, quoted over 1500 times in the media , has been a radio talkshow host, a newspaper daily columnist, Wharton Fellow, SEACeM Fellow, columnist for theonlinecitizen and Malaysiakini, executive producer of Ilo Ilo (40 international awards), invited to speak more than 200 times in over 30 countries, CIFA advisory board member, founding advisor to the Financial Planning Associations of Indonesia and Brunei. He has 3 Masters, 2 Bachelors degrees and 13 professional  qualifications.