The Straits Times says

After strong year, GIC faces new challenges

New: Gift this subscriber-only story to your friends and family

Singapore's GIC and Temasek have recorded standout performances for the year ended March 31, 2021. GIC posted its highest 20-year annualised return since 2015 - 4.3 per cent in real terms, compared with 2.7 per cent a year ago, while Temasek earned a hefty 24.5 per cent annual return, its best performance since 2010. Both portfolios benefited from base year effects. Stock markets crashed during March last year after the onset of Covid-19, but then rebounded strongly over the next 12 months following interest rate cuts and asset purchases by central banks and massive programmes of fiscal stimulus by governments.

GIC points out in its latest annual report that global equity market returns were of the order of 55.3 per cent last year. It also notes that even though the rolling 20-year real rate of return is intended to measure long-term performance, it can still reflect a significant cyclical element, especially when the cycles are pronounced at the start or end of the 20-year period. It so happens that this year, the cycles were pronounced both at the start and at the end. GIC's latest 20-year return spans the period April 2001 to March 2021, which means that the bad year of 2001 - that of the dot com crash - dropped out of the calculations and the market boom year of 2021 was included.

Already a subscriber? 

Read the full story and more at $9.90/month

Get exclusive reports and insights with more than 500 subscriber-only articles every month

Unlock these benefits

  • All subscriber-only content on ST app and

  • Easy access any time via ST app on 1 mobile device

  • E-paper with 2-week archive so you won't miss out on content that matters to you

Join ST's Telegram channel and get the latest breaking news delivered to you.