SECOND Minister for Finance Indranee Rajah said in Parliament on Tuesday that Singapore sovereign wealth fund GIC and state investor Temasek Holdings have “made money over the long term” as their portfolios grew.
In her response to Member of Parliament Henry Kwek, she cited how Temasek’s net portfolio value was S$164 billion in 2007 as compared to S$275 billion in 2017.
Temasek’s investments delivered an annualised nominal shareholder return of 6 per cent in Singdollar terms, for the 20 years ending March 31, 2017, said Ms Indranee. Temasek reports its returns in nominal terms, without being adjusted for inflation.
Similarly, over the same period, GIC achieved an annualised real return of 3.7 per cent, which is over and above inflation, she said.
Temasek will be releasing details of its performance as at March 31, 2018, later on Tuesday, while GIC will be doing so later this week.
Ms Indranee emphasised that both Temasek's and GIC’s investments benefit Singaporeans through the Net Investment Return Contribution (NIRC) to the annual budget.
The NIRC framework allows the government to spend up to 50 per cent of the long-term expected returns from the reserves.
"It has become an increasingly important fiscal resource," she said.
In FY2018, the NIRC is estimated to be about S$15.85 billion, or about 18 per cent of overall revenues – this makes it the single largest source of government revenues, said Ms Rajah.
“There are very few countries in the world who have national savings that they can tap to fund their budgets, and this is especially rare for a country like Singapore which has no natural resources,” she said.
“If we continue to be disciplined and responsible stewards of this endowment, our reserves will continue to benefit all Singaporeans, young and old, today and tomorrow.”