I refer to the article “Assets under management in S’pore up 7% to $2.7 trillion” (Straits Times, Sep 27). It states that “Sustained net fund inflows and broad-based improvements in market valuations supported the growth, it added.
“Compliance requirements are still very onerous and that sets the bar very high for new entrants, but in a small country like Singapore (with) limited scope for local investments, you end up with a mismatch of big pools of capital and small targets””.
On the same day (27 September) in the Straits Times – there is an over half-page advertisement “”The Mathematics of How Money Grows” – A basket of value stocks @ 10 -12% p.a. – Hard Facts – Every $200,000 will grow to $800,000 in 12 years’ time at 12% compounded yearly.
$800,000 will give you $40,000 yearly retirement income @ 5% withdrawal rate. That will be $3,333 a month of lifetime income You will not outlive your money and you can still leave an estate for your loved ones.”
In this connection, GIC’s latest 20 years’ and Temasek’s “from inception” annualised returns are 5.1 per cent (in US$ terms – lower if in S$ terms) and 16 per cent (in S$ terms), respectively. The highest return ever publicly disclosed by the GIC was 8.2 per cent (in S$ terms) for the 25 years from the GIC’s inception in 1981 till 2006.
So, how many fund managers in Singapore have been able to consistently give 12 per cent per annum returns, as described in the advertisement?
Leong Sze Hian