Temasek, GIC returns are reasonable and within govt expectations: Jeffrey Siow

SINGAPORE – The returns generated by Temasek and GIC are “reasonable and within expectations” as assessed by the Government, Senior Minister of State for Finance Jeffrey Siow said in Parliament on Jan 12.

He was responding to questions from MPs who asked if the two state investors have underperformed.

Mr Siow noted that media reports have

compared the performance of GIC and Temasek with that of other funds

, including other sovereign wealth funds.

A Financial Times article published in December 2025 had questioned the performance of the two investment entities, saying that their recent returns have “compared unfavourably with many global peers”.

The article also said that the two Singapore investment entities are “among the weakest performers among 50 similar global organisations over a 10-year period, according to Global SWF data, despite being among the largest and best resourced”.

“But such comparisons should be interpreted in their proper context because different funds operate under different mandates and risk profiles,” said Mr Siow, who is also Acting Transport Minister.

He added: “Our focus has always been on long-term performance rather than on short-term or year-to-year fluctuations.”

GIC is the Government’s fund manager. Its mandate is to preserve and enhance the international purchasing power of the assets under its management. The sovereign wealth fund recorded a real rate of return of 3.8 per cent a year for the 20 years to March 31, 2025.

Meanwhile, Temasek operates mainly as an active, bottom-up investor, and invests directly in companies and markets where it sees long-term growth potential. Over the last 20-year period, Temasek reported a total shareholder return of 8 per cent per annum in US dollar terms.

“We will continue to review their mandates and performance regularly, in line with changes in the global economic, investment landscape,” Mr Siow said.

He also responded to MPs who asked if the recent investment performance of GIC and Temasek had implications on the sustainability of Singapore’s net investment returns contribution (NIRC) and the Government’s ability to meet its Central Provident Fund (CPF) liabilities.

He said: “The Government is able to meet all debt-servicing costs and obligations, including the committed CPF rates, through the Special Singapore Government Securities (SSGS).”

He noted that GIC does not just manage the SSGS or CPF monies on its own, but it manages a combined pool of government funds, including a significant sum of unencumbered assets.

“This approach allows GIC to invest for the long term and secure good long-term returns,” Mr Siow said.

But he also noted that GIC’s returns could be low or even negative over shorter periods owing to the uncertainty and volatility of investment markets.

“But the Government is able to absorb these short-term market fluctuations and risks because it has a strong balance sheet,” he said, adding that the Government has a substantial buffer of net assets that enables it to meet its obligations.

Mr Shawn Loh (Jalan Besar GRC) asked if there was a point that had to be reached before the Government would worry and review the framework of its funds.

Mr Siow replied that when it comes to an investor with a larger risk profile like Temasek, some volatility in returns is expected.

“But over the long period, these volatilities and these fluctuations should even out, and as long as (GIC and Temasek) make what we require of them – which is something that is sustainable, in line with their risk profile, in line with the decisions they are taking, including their capability-building and investments in new areas – I think we should be able to accept that these are within our expectations,” he said.

GIC took on lower risk in recent years

Mr Siow noted that in recent years, GIC took pre-emptive measures to moderate its risk exposure, anticipating increased market volatility and heightened valuations.

“These measures were intended to keep portfolio risks within acceptable limits and to guard against the possibility of significant asset impairment in the event of a sharp market correction,” he said.

“But as equity markets have continued to remain elevated, these prudent de-risking measures resulted in some foregone returns.”

Hence, any assessment of returns must be considered alongside the risks taken to achieve them, Mr Siow said, adding: “Ultimately, what is more important is the longer-term performance achieved within acceptable risk limits.”

He said that GIC’s 3.8 per cent per annum real return over 20 years reflects in part GIC’s “active management, which enabled it to consistently add value to portfolio returns, preserve the international purchasing power of the assets under its management, and deliver returns above global inflation”.

Mr Siow said that GIC also took the decision to de-risk during periods of distress, such as during the Covid-19 pandemic.

“And if they had not done so, our asset base could have been permanently impacted as many other funds would have experienced during this period. So, I think we have to leave the professionals to do the work that they do.”

He added that the Government works with the GIC board to make sure that the mandate continues to be met, and that given its risk profile, to take a more conservative approach to preserve the capital base.

“We think they have met expectations in this regard,” he said.

Temasek expands into global markets

On the other hand, Temasek operates on the higher end of the risk spectrum, Mr Siow said.

It began as a holding company for the Government’s local assets, but it has expanded into investing across global markets, even as Singapore-based Temasek portfolio companies continue to form a core part of its total portfolio.

Mr Siow acknowledged that in recent years, Temasek’s performance was affected by the Chinese market, although this was mitigated by higher returns from investments in Europe and the United States.

Five MPs also asked questions on how Temasek benchmarks its performance and its restructuring plans.

Temasek announced in August 2025 that it

will be restructuring and setting up three entities

to manage three distinct portfolio segments. The three segments are global direct investments, Singapore-based Temasek portfolio companies, and partnerships, funds and asset management companies.

Mr Siow said: “The Government’s mandate for Temasek is that it should deliver good, sustainable long-term returns.

“The Government ensures that Temasek has a competent board to oversee its management, but does not otherwise influence or direct Temasek’s individual investment decisions.”

He noted that Temasek’s Singapore portfolio has been able to contribute steady returns to Temasek’s overall portfolio and to Singapore’s economic growth over the long term.

“Beyond exercising the appropriate oversight over its investments, there is no requirement for Temasek to pursue specific strategic or economic development strategies,” Mr Siow said, adding that efforts to develop industry ecosystems or early-stage start-ups are led by the Government rather than Temasek.

Temasek may participate in the Government’s initiatives, but it does so on commercial terms, he said.

The Government also does not intervene in its restructuring decisions, he added.

“Ultimately, the Government holds the board of Temasek accountable for delivering good long-term returns on its overall portfolio, and that is on the basis of net portfolio performance, after deducting all investment fees and expenses.”

In response to queries on how Temasek compares with global benchmarks, including one from Associate Professor Jamus Lim (Sengkang GRC), Mr Siow said it is “not always appropriate or meaningful” to directly compare Temasek’s performance with other funds.

“Temasek is not quite the same as a typical sovereign wealth fund,” he said.

But he added that Temasek’s performance has been commensurate with other sovereign wealth funds with a higher risk profile, such as the Canadian pension plan investment board. Both have achieved 20-year annualised total shareholder returns of about 8 per cent.

“The Government does expect Temasek to achieve good, sustainable returns over the long term, and as an asset holder of major Singapore-based assets, we expect them to exercise appropriate oversight over their investments, no different from any other responsible asset holder,” he said.