GIC Celebrates Its Achievements
5% above global inflation?
Fair enough.
I mean its not Temasek.
When you read through the chronological history of GIC, some of you may see what I see:
1) Great Market Timing Or What?
Why did Mr Goh Keng Swee bother setting up GIC in the first place? I mean "risk-free" US 10 year treasuries were yielding above 10% in the early 80s!?
Try figuring out what better long-term returns meant?
When GIC was setup during May 1981, was it blind dumb luck or was it great marketing timing as US bonds were near the bottom of its bear cycle?
2) Baxxs Bigger!
Early 2000s GIC became more confident and mancho! Less reliant on cash and bonds?
No worries mate! I got it!
Pivot to more public and private equity and real estate!!!
Give GIC a Tiger!
3) Passive To Active
To some, this may come as a surprise!
2010s to 2020s....
Isn't this the time when passive investing was beating the majority (75%) of active funds handily?
And Warren Buffett won his bet?
Wait. What?
I'm having a chuckle right now!
Feels good.
My poke is safe!
Smol,
ReplyDeleteHmm, think GIC all along has focused on active diversified investing (passive investing wasn't a thing yet in the 1980s).
It's just that in the last 10 years, GIC has behaved more like a VC for a portion of the portfolio e.g. forming special-purpose investment vehicles, provide seed capital to promising entrepreneurs, taking board seats to have oversight of investee companies, investing into PE either directly or in partnerships with firms like Blackstone and KKR.
And yet, GIC's returns over the past 20 years is exactly the same as its reference 65:35 passive index ... 6.8% p.a.
In fact, GIC has underperformed for the most recent 5-year and 10-year periods. The only saving grace is that GIC's portfolio is slightly less volatile than the 65:35 passive index.
Still, it makes me wonder if it's worth hundreds of millions in fees & staff compensation. :P
You there!
DeleteYes, you!
Can I have your name and I/C please?
Why?
Because we want to invite you for "coffee"...
Spur,
Mr Pinky just "praised" GIC... You never give face...
Its pretty obvious for those who can "read" statistics. Don't have to say it out loud...
You think what's my "fair enough" was for?
Especially when anyone and everyone with access to a robo adviser can also "replicate" the performance of a 65:35 passive index...
Of course its "active" investing for GIC since its inception ;)
Passive investing is flavour of the decade thingy. It worked great with Central Bankers suppressing volatility through money printing. Stocks only go up!
Let's see if passive investing can survive another decade when the bonds vigilantes finally woke up from their hibernation ;)
Its fun writing my first post on a subject that except for the headline, I've not talked another word about it!
ReplyDeleteYes, this post is NOT about GIC ;)
1. When US 10 year treasuries were yielding above 10%, would you still save money "there" if you can easily get above 4% in savings or fixed deposits at our local banks? (Old fogeys, remember that period?)
2. If you are already quite skilled with passive investing (now that's an oxymoron), and you believe you can "easily" get the same GIC performance with a 65/35 index fund - robo or no robo - isn't 5% ABOVE global inflation better than what you getting today?
That "one" you haven't discounted it with inflation rate you know?
3) OK, passive is not your style. And we leave aside its harder to justify the salaries and bonuses if we just depend on cash and bonds.
For those who are not in it just for the money, and would like some intellectual challenge in our lives, I guess dipping our toes into properties and equities may just add that extra spice in our lives!
Even institutions do the same. Just look at the former SPH. People all stay clear of its media "assets" now.
What's the current bidding war for?
Properties ;)
65/35 index fund - robo or no robo?
ReplyDeleteWith zero commission or no minimum commission brokerage account; small retail can also train or turn themselves into 65/35 index fund - robo if they want to. :-)
CW,
DeleteEvidently that's too "hard" or "risky" for some...
Especially those that just want the returns; but unwilling to put in the hours...
Toto people?
I think I'm the first one to lump "savers" with "Toto punters" together!?
Toto punters want the reward upfront; savers are OK waiting 30 years to get the bumper harvest.
Both are gamblers.
Why?
The longer the time frame, the greater the risks things can go wrong ;)