Singapore’s US$288 billion Temasek stays bullish on China – targets US, India for growth

In its annual review, the fund announced a S$7 billion (US$5.18 billion) increase in its net portfolio this week, cementing its status as the world’s 11th largest sovereign wealth fund, according to Global SWF, a platform that tracks such funds.

For the full year to March this year, Temasek weathered volatility to post a 1.6 per cent annual return, rebounding from the previous year’s 5.07 per cent decline.

The fund’s long-term returns held steady at 6 per cent over 10 years and 7 per cent over 20 years, as it maintained a focus on long-term returns with a mix of financial, transport, telecoms, real estate and agriculture investments.

Temasek’s “main focus” was 10- and 20-year returns, said Chia Song Hwee, the fund’s deputy chief executive officer, at the results announcement on Tuesday. “We take a long-term view and invest with that in mind. We’re not a kind of a day trader investor.”

Another key priority for Temasek was to build a “resilient portfolio that could withstand market dislocations”, Chia said.

“During the bull market, we may not be at the top in performance, but hopefully at the low of the market, our portfolio will be able to withstand better. Our portfolio is never static because the environment always changes on us.”

While rising interest rates have affected parts of Temasek’s holdings, Chia said some assets actually gained ground during the rate-tightening cycle.

“We have to accept the annual fluctuations in the numbers,” he said. “What is important is the underlying assets, whether or not the performance can continue.”

Despite China’s economic slowdown, with growth expected around 4-5 per cent this year and sectors like property remaining weak, Chia said Temasek will maintain its investment focus on the country.