GIC invest CPF in S’pore stocks


I refer to the article “Business leaders call for CPF monies to be invested in Singapore shares to help ‘moribund’ market” (Straits Times, Jan 6).


It states that “”Currently, our CPF money is pooled with our other reserves and managed by GIC. Unlike other jurisdictions where their pension funds have provided strong support for their stock market, Singapore rides against the wave by specifically stating as a policy that the funds managed by GIC are to be invested abroad” …


Describing the local share market as “moribund”, SBF said that the Government “should consider separating the CPF component and managing it differently as how pension funds are managed. This will free these funds from the GIC investment restrictions and will likely result in some investments in the Singapore market. These investments will send strong signals on our market to other investment professionals”.


STI returns 1.5% p.a. last 20 years?


Looking at the Straits Times Index (STI) historical chart on Yahoo Finance Singapore – the returns for the last 5, 10 and 20 years is only about -13.1, 36 and 35 per cent, respectively – annualised returns of only about -2.8, 3.1 and 1.5 per cent respectively.


Given the dismal performance – is it a good idea to invest CPF in Singapore stocks?


CPF members don’t benefit from GIC’s returns?


As to “CPF members currently receive a fixed interest rate on their CPF funds.


The interest is paid out from Special Singapore Government Securities (SSGS) that are issued and guaranteed by the government which CPF board has invested in with the CPF monies.


GIC manages the CPF proceeds as well as other government assets” – how would Singaporean CPF members benefit when their CPF interest is fixed – regardless of the GIC’s returns derived from investing our CPF funds?



Leong Sze Hian

A.S.S. Contributor

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