The reason Why CPF only gives 2.5% return

[Papsmearer]

Hard to give more than that when GIC (which is funded from CPF money) is only earning a real rate of return of 4%. Not sure if that is before or after overhead and admin expenses and salaries and bonus. From the GIC website:

What are the returns of the GIC Portfolio?

In its annual report for 2012/2013, GIC reported 5, 10 and 20-year annualised nominal returns in USD terms of 2.6%, 8.8% and 6.5% respectively. It also reported a 20-year real rate of return of 4.0%. The rolling 20-year real rate of return is the primary metric for the Government to evaluate GIC’s investment performance.

 

[davetan3]

It should be nominal returns in SGD dollars to compare apple to apple.
I made gains in my US stock investment but over 10 years I am better off putting in SGD Fixed Deposit !!

Perhaps CPF could give better returns if the $$ is not drawn out for housing, education etc.