In its latest annual report, called the Temasek Review, Temasek reported a one-year total shareholder return of minus 2.3 per cent for the year ended March 31, 2020. While this seems a disappointing performance, it needs to be viewed in perspective. First, it reflects in part the exceptionally sharp correction in financial markets in March, as the impact of the Covid-19 pandemic began to be priced in, and stock prices declined by 25 to 30 per cent in most G-20 countries. Markets have since bounced back and Temasek's one-year return would almost certainly be in positive territory if measured now.

But that issue aside, it is important not to be distracted by the single-year performance of a long-term investor such as Temasek. This should also apply to years in which it has produced outsize positive performances, such as in 2010 and 2015, during which the returns were 43 per cent and 19.2 per cent, respectively. As most of Temasek's investments are in equities as opposed to fixed-income instruments, year-on-year returns are bound to be volatile. What matters is its performance over the long term. Over the last 10 years, Temasek's annual returns have been 5 per cent and its dividend income has averaged $8 billion a year, including $12 billion in 2020 - a reasonable showing in the near-zero interest rate environment that has prevailed for most of that period.