## GIC returns: half the story?

I refer to the article “GIC’s real rate of return over 20 years steady at 3.9%” (Straits Times, Jul 31).

No more S\$ returns?

In the past, the GIC used to give the returns in S\$ terms as well, instead of just US\$.

So, why is it that this year’s GIC annual report once again reports the returns in US\$ only?

As the S\$ has been appreciating against the US\$, how much lower would the returns be in S\$?

Have 20-year real returns, but no 5 and 10-year?

I find it rather strange that GIC’s report gives the annualized real rate of return over a 20-year period, but not the real rate for 5 and 10 years.

If it can give the nominal returns for 5, 10 and 20 years, why can’t it give the real returns for 5 and 10 years too?

For example, as the 5-year nominal return was only 3.4 per cent, what was the real return?

GIC returns reporting like a chameleon?

For example, GIC reported its 20-year nominal returns in both US\$ (5.7%) and S\$ (4.4%), in its 2009 report (see HERE). It also gave the real return in S\$, at 2.6 per cent, but not in US\$.

However GIC’s 2010 and 2011 reports only gave returns in US\$. Which means that the report went from reflecting no real US\$ returns in 2009, to only real US\$ returns in 2010 and 2011, being 3.8 per cent and 3.9 per cent respectively (see HERE), and no longer in S\$. Why is this so?

In its 2011 report, GIC disclosed the 5 and 10-year nominal US\$ returns (being 6.3 per cent and 7.4 per cent respectively), instead of just the 20-year returns in previous reports. However, the then new 5 and 10-year returns were only given in nominal and not real terms? And again why were the returns not reflected in S\$?

GIC vs Temasek?

Since Temasek gives its returns from inception, why can’t the GIC do the same?

As GIC gives the rolling 20-year returns, why can’t Temasek do the same too?

Otherwise, it may be difficult to compare GIC and Temasek’s returns.  It is akin to trying to match two different rulers with different measurements.

As if trying to watch one chameleon was hard enough – try watching to keep track of two!

Leong Sze Hian

### 2 Responses to “GIC returns: half the story?”

1. Saycheese

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When GIC skip reporting returns in S\$, I assume the worst. The returns is probably negative, just like a depreciating foreign currency FD that pays a better nominal interest, when the interest and original deposit is converted back into S\$, the amount is less than the initial deposit.

2. [...] GIC returns: half the story? [...]

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