The issue of why the Government Investment Corporation of Singapore(GIC) has omitted from its annual reports its annualised nominal returns expressed in Singapore dollars, surfaced in Parliament on Wednesday.
The question was asked by Non-constituency MP Lina Chiam.
Responding, Minister of State for Finance Josephine Teo explained that the GIC stopped publishing its nominal returns expressed in Singapore dollars three years ago, to avoid confusion when comparisons are made with other fund managers or global indices.
Its annual reports include the nominal return in US dollars as that is the commonly expressed basis internationally for comparisons of investment returns achieved by global investment funds.
Elaborating on the problem of confusion, Mrs Teo said: "Indeed, in previous years, we found that some readers (of GIC's annual reports) had compared GIC's returns in Singapore dollars with the returns of global market indices in US dollars."
She also said that the portfolio's real return, which is nominal returns less global inflation, is the same regardless of the currency used for its calculation.
This is because both the nominal returns and global inflation have to be expressed in the same currency for computation. Changes in how one component is expressed in terms of currency will similarly apply to the other, and hence the currency effect cancels out.
Ms Teo also said that more information on GIC's performance is being published now than five years ago, when annual reports started. Reports in the last two years include performances over a five and 10-year period, in addition to the 20-year period that remains GIC's primary goal.