Mediocre GIC returns

[winnipegjets]

11. Hence, although GIC's returns over the last 20 years ending March 2014 have averaged 6.5 per cent in USD terms, or 5.3 per cent in SGD terms, it has experienced several years where its returns were low or negative. To take the most recent episode, the Global Financial Crisis led to a significant reduction in GIC's annualised five-year return ending March 2013- to just 0.5 per cent in nominal SGD terms. But moving just a year forward to March 2014, its 5-year annualised return rebounded strongly. This volatility was also seen in comparable market portfolios.

Why are we spending hundreds of millions operating an investment agency that can only deliver mediocre results?
Invest in S&P etf and you can generate between 7-10 percent over the long term and save at least a few billions as well by canning GIC and Temasek.

 

[winnipegjets]

Use this calculator to see the returns of S&P.

http://dqydj.net/sp-500-return-calculator/

 

[ginfreely]

Yeah really no value add, might as well invest in S&P like that.

 

[frenchbriefs]

not easy though....first off GIC is a massive fund,the CPF bulk alone is $300 billion in equity,where are u going to find an etf or vanguard fund that can take $300 billion being dumped into it?the biggest s&p500 index fund i see is only $68 billion in market cap.

also investing into s&p500 now may not be very advisable now.....especially with the turmoil the us economy has been going thru the last 2 decades,2 bubbles and 2 major recessions.....right now i think S&P500 is in another bubble,i have all my assets invested into bond etfs instead.......

if u had ur money invested in the year 2000 to the year 2010,u would actually have lost money in the stock market......imagine telling ur entire CPF investor base that they not only didnt make any money after 10 years they actually lost some......that is why 2001 to 2010 is called the lost decade......

if u extrapolate the results from 2001 to 2014,u will have a total return in the s&p500 of only 30%......a measly 30% after 14 years.........thats less than 2% annualised......

 

[winnipegjets]

Yeah really no value add, might as well invest in S&P like that.

And save hundreds of millions by getting rid of Temasek and GIC.

 

[winnipegjets]

not easy though....first off GIC is a massive fund,the CPF bulk alone is $300 billion in equity,where are u going to find an etf or vanguard fund that can take $300 billion being dumped into it?the biggest s&p500 index fund i see is only $68 billion in market cap.

Then create one lor. You invest over time.

also investing into s&p500 now may not be very advisable now.....especially with the turmoil the us economy has been going thru the last 2 decades,2 bubbles and 2 major recessions.....right now i think S&P500 is in another bubble,i have all my assets invested into bond etfs instead.......

Just look at the returns of S&P for 30 year period, ending this year. It is 10 percent average annually despite the internet bubble burst, the financial crisis.
We are not asking that the investment be done today ...it is over a period of time to phase out GIC and Temasek.

if u had ur money invested in the year 2000 to the year 2010,u would actually have lost money in the stock market......imagine telling ur entire CPF investor base that they not only didnt make any money after 10 years they actually lost some......that is why 2001 to 2010 is called the lost decade......

Long term lah ...30 year horizon ending 2014 ....average annual return is 10 percent! GIC managed only 5 percent!

if u extrapolate the results from 2001 to 2014,u will have a total return in the s&p500 of only 30%......a measly 30% after 14 years.........thats less than 2% annualised......

Why you pick and choose the period? A sinkee puts in $10k a year for 30 years (CPF contribution period) would see its investment grow to $1.3 million just by investing in the S&P ETF. Leaving it in CPF, the account grows to $450k.

Are you that foolish to give up $850k in returns????????????