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"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder

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Value Investing
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Tuesday, 10 July 2018

Updated for Temasek

TEMASEK Holdings warned of increased near-term downside risks even as buoyant stock markets lifted its portfolio to a 12.19 per cent one-year return for the financial year ended March 31, 2018.

The Singapore government-owned investment firm's net portfolio value grew to a record S$308 billion, up from S$275 billion a year ago, according to its annual report released on Tuesday. A year ago, the portfolio returned 13 per cent.

The latest results came as key listed holdings posted strong gains over the year; market capitalisation grew 44 per cent for DBS Group Holdings, 91 per cent for Ping An Insurance and 73 per cent for Alibaba Group Holding.

Annualised returns over 20 years was 7 per cent, up from 6 per cent a year ago. Dividend income was S$9 billion for the year. Net profit improved to S$21 billion from S$14 billion a year earlier, Temasek said.


  1. A lot of the gains from SG & China banks / insurance companies, China social media ecosystem companies, and US growth companies (tech & healthcare & consumer discretionary & maybe defense).

    Say this year still got plenty of investment opportunities.

    But said they may be slowing down investment pace in 9-18 months.

    So someone is seeing higher risk of significant economic slowdown (recession?) from Apr 2019 to Dec 2019?? Hohoho!

  2. Latest from GIC ... to 31/3/2018:

    Over 20 years -- 5.9% annualized.
    Over 10 years -- 4.6% annualized.
    Over 5 years -- 6.6% annualized.
    All above in nominal terms.

    In real terms, over last 20 years -- 3.4% annualized i.e. inflation was 2.5% p.a.

    1. Does it include dividend payout?

    2. They didn't say, but logically should. Most of the time these guys will re-invest the dividends / coupons / interest payouts.

      Don't forget that half of the "expected long-term real return" will be given to MOF to be used in the Budget under NIRC each year.

      So if 20 years' real return is 3.4%, then maybe GIC managers will earmark 1.7% worth of portfolio value within the liquid allocation portion for this purpose.

      OK ... GIC said their reference portfolio (i.e. benchmark) is 65% global stocks & 35% global bonds.

      So I use Portfolio Visualizer to test.

      Lo and behold, the test portfolio gave a nominal 20-year CAGR of 7.97% ... compared to GIC's 5.9%.

      A 2% alpha over 20 years is a BIG DEAL in the investment world. So small fry like us got chance to beat the big boys! LOL!!

      Of course cannot just compare like that lah .... need to see risk-adjusted performance too e.g. Sharpe ratio.

      And also the "jialat factor" --- (1) what's the max drawdown? (2) How long it took to breakeven/recover from drawdown?

      GIC doesn't provide these details.

  3. Just find out that Temasek reinvest the dividend.

    The Ins and Outs

    1. They may include dividends as investment gains for calculation of portfolio performance.


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