There are many reasons why GIC is ill-suited to manage our retirement savings.
In this post, I will just highlight an instance of GIC’s sneakiness in its attempt to mislead CPF members on its returns.
In the past, when GIC first started to disclose data on its performance, it had disclosed 20-year returns in Sing dollar. Due to the Global Financial Crisis, nominal and real returns in S$ collapsed to 4.4% and 2.6% respectively as at 31 March 2009.
After hitting a record low in 2009, GIC’s annualized 20-year return suddenly shot up to 7.1% in its 2010 annual report. This was unbelievable considering the returns in the preceding 4 years before the collapse did not surpass 7%.
Hmm .. how did scholars in GIC create money out of thin air?
On closer scrutiny, GIC’s high return in 2010 was due to …. changing its reporting currency from S$ to US$.
The only reason for this sneaky move: to mislead citizens as reporting in S$ would have resulted in a much-lower 20-year annualized return.
GIC is also not consistent with the disclosure of other information and has put out tons of irrelevant information, seeking to confuse. To date, no one knows the billions in CPF and reserves dollars paid to top management – for its poor performance.
GIC is afraid to disclose absolute figures for fear that its abysmal performance will be confirmed.
Funds which outperform do not resort to manipulating data. In fact, they are willing to be scrutinised and disclose all material information which should be in the public domain or to their shareholders. An example would be Norway’s GPFG which discloses all its 8985 investments.
While GIC refuses to properly disclose even one single investment, why would a much larger fund do so? Answer: It has nothing to conceal whereas GIC has lots to conceal.
What GIC has been doing is more than disappointing and I really have no trust in GIC managing my CPF.