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Singapore’s GIC records its worst five-year performance in nearly a decade

Singapore’s sovereign wealth fund, GIC, has reported its poorest five-year returns since 2016, underlining the economic challenges faced by institutional investors amidst global economic slowdown, rising interest rates, and geopolitical tensions.

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1 year ago

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Singapore’s sovereign wealth fund, GIC, has reported its poorest five-year returns since 2016, posting annualized nominal returns of 3.7% for the five years ending 31 March.

GIC’s disappointing fiscal year reflects the downturn in equities resulting from efforts to curb inflation and the impact of Russia’s invasion of Ukraine. The returns also take into account major events such as the Covid-19 pandemic and escalating great power conflicts, but do not include the recovery since March.

The fund attributes the sluggish global economy and rising interest rates as contributing factors. GIC’s Chief Executive Officer, Lim Chow Kiat, issued a warning that the economy and markets are still experiencing the fallout from policy tightening. “We are not out of the woods yet,” he cautioned, “The consequences of the policy tightening are still being felt in the economy and markets.”

Despite the disappointing short-term results, the fund managed to achieve an eight-year high of 4.6% for its 20-year annualized real rate of return, marking its highest point since 2015. GIC does not disclose one-year results or the value of assets under its management.

The strong performance on the longer-term scale was largely due to the omission of a weak year in the early 2000s from the rolling computation window, which positively impacted the key return metric.

To navigate these challenging times, marked by soaring inflation, geopolitical unrest, and aggressive monetary policy tightening, GIC plans to continue focusing on investment opportunities that offer stable long-term returns, notably in the infrastructure field.

Jeffrey Jaensubhakij, GIC’s Group Chief Investment Officer, states that investments in infrastructure provide “inflation-protected returns,” a valuable asset in an uncertain environment. The fund is specifically focused on businesses that generate stable, predictable, and often inflation-linked cash flows across macroeconomic cycles.

In response to the global shift toward green energy and the digitalization of the economy, GIC sees a growing demand for new infrastructure such as fibre networks, data centres, and green power generation and storage. Since 2016, the fund has quintupled the size of its infrastructure portfolio, committing annually between US$10 billion to US$20 billion across six continents.

As a result of this increased emphasis on infrastructure, the fund’s real estate allocation rose to 13% as of March 2023, up from 10%. Allocations to emerging market equities have also risen by one percentage point to 17%, while those to developed market equities have decreased to 13%. Cash now accounts for approximately a third of the portfolio.

Despite the unsettling short-term losses, GIC continues to maintain a cautious investment stance. Its diversified portfolio offers some cushion against market corrections. Nominal bonds and cash, traditionally viewed as safer investments, still comprise the largest share of the portfolio at 34%, albeit down from 37% a year ago.

The losses suffered by GIC could be significant. The fund’s portfolio is estimated to be worth S$1,237b ($1,046b estimated in February 2022, with an additional $191b transferred to GIC by the Monetary Authority of Singapore in FY2023). Thus, the potential loss could amount to around S$74.6b, based on a -6.03% return ($1,237b x 6.03%).

This figure is derived from last year’s return for a 60/40 portfolio (comprising 60% MSCI World and 40% FTSE World Government Bond – Developed Markets (Hedged EUR)), which was -6.03%.

If the 37.9% global stock market loss in 2002 is discounted and the 20-year annualized return last year rose from 4.2 to 4.6%, the actual loss may be higher than the current estimate. This latest development places GIC, and by extension, Singapore’s financial landscape, in a precarious position.

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WP Engine banned from WordPress.org amid escalating legal fight with Matt Mullenweg

Following Matt Mullenweg’s ban on WP Engine from accessing WordPress.org resources, many WP Engine customers are left vulnerable, as they can no longer access plugin updates or security features. Mullenweg urged users to seek alternative hosts, escalating the legal conflict between the two companies.

Published

7 days ago

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27 September 2024

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In a sharp escalation of tensions, WordPress co-founder and CEO Matt Mullenweg has publicly criticized WP Engine, a popular hosting provider, while also cutting its access to WordPress.org’s resources.

The dispute centres on legal and trademark issues, with Mullenweg accusing WP Engine of both profiteering off WordPress’s open-source platform and damaging its community.

On 25 September, Mullenweg posted a scathing blog on WordPress.org, stating that WP Engine no longer has free access to the platform’s resources and calling for customers to avoid the service.

He also detailed that WP Engine’s recent actions disrupted thousands of websites. “WP Engine broke thousands of customer sites yesterday in their haphazard attempt to block our attempts to inform the wider WordPress community,” Mullenweg claimed.

The conflict appears rooted in WP Engine’s use of WordPress’s open-source platform while allegedly not contributing to its development or upholding community standards.

At the core of the dispute is WP Engine’s practice of locking down a WordPress feature that tracks revision history for posts. According to Mullenweg, this undermines a crucial aspect of WordPress’s promise of data transparency and protection.

WP Engine, in turn, has argued that Mullenweg is trying to coerce them into paying millions to license the WordPress trademark, a claim Mullenweg denies.

The host provider WP Engine has faced harsh criticism for disabling certain features in WordPress core, which, according to Mullenweg, is central to protecting user data.

“WP Engine wants to control your WordPress experience,” Mullenweg wrote, accusing the company of exploiting WordPress’s free services while making billions of dollars in revenue.

WP Engine’s inability to provide security updates and other resources leaves customers vulnerable, Mullenweg suggested, urging users to consider alternative hosting options.

Additionally, Mullenweg argued that WP Engine would need to replicate WordPress’s security infrastructure independently.

He emphasized that WordPress.org has collaborated with hosting providers to address vulnerabilities at the network layer, a service WP Engine can no longer access freely. “Why should WordPress.org provide these services to WP Engine for free, given their attacks on us?” he asked.

The ban leaves WP Engine in a precarious position, as customers who rely on WordPress plugins and themes may face significant difficulties accessing the latest updates.

These restrictions have raised alarms in the community, as outdated plugins are often the target of cyberattacks. Hackers frequently exploit vulnerabilities in WordPress plugins, potentially compromising millions of websites globally.

The dispute between WordPress and WP Engine has been simmering for some time.

Earlier in September, Mullenweg described WP Engine as a “cancer to WordPress” during a speech at the WordCamp US Summit, accusing the company of profiting off the platform without giving back.

In response, WP Engine sent a cease-and-desist letter to Mullenweg and Automattic, claiming that Mullenweg’s comments were an attempt to extort the company into paying for a trademark license.

WP Engine’s legal team also accused Mullenweg of threatening a “scorched earth nuclear approach” if they refused to comply with his demands.

The cease-and-desist letter was swiftly countered by Automattic, WordPress’s parent company, which asserted that WP Engine had violated WordPress and WooCommerce trademark policies.

The updated trademark policy on WordPress.org explicitly cautions users against assuming WP Engine is affiliated with WordPress. “Many people think WP Engine is ‘WordPress Engine’ and officially associated with WordPress, which it’s not,” the updated guidelines explain.

The legal dispute has thrown both companies and their customers into uncertainty.

While WordPress operates under a GPL (General Public License), which makes the software free for use, hosting providers like WP Engine must offer services beyond the core platform, such as user login systems, update servers, and security monitoring.

Mullenweg’s decision to sever WP Engine’s access to WordPress.org resources has already caused disruption, with many sites reporting functionality issues and concerns about security vulnerabilities.

WP Engine has pushed back against Mullenweg’s actions.

In a public statement, the company accused Mullenweg of abusing his influence over WordPress to disrupt WP Engine customers’ access to WordPress.org, calling the move “unprecedented and unwarranted.”

The company argued that the ban affected not only its users but also developers who rely on WP Engine’s tools to build and maintain WordPress plugins.

As the dispute unfolds, the wider WordPress community is left to grapple with the implications. Developers and hosting providers have expressed concern over the trademark battle, fearing that similar restrictions could extend to them.

The WordPress Foundation, which holds the trademark, has already filed to trademark “Managed WordPress” and “Hosted WordPress,” sparking debate about how this might affect commercial users.

For now, the WordPress ecosystem is in flux as users, developers, and hosting providers wait to see how the legal battle will unfold and whether WP Engine will regain access to critical WordPress.org resources.

Until then, Mullenweg’s message is clear: if you want the true WordPress experience, WP Engine is no longer the place to find it.

Editor’s note: This publication was previously hosted on WP Engine.

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DPM Gan Kim Yong appointed to GIC board as director

Deputy Prime Minister Gan Kim Yong will join the GIC board as a director from 1 October, enhancing his extensive portfolio that includes serving as Singapore’s Minister for Trade and Industry and Chairman of the Monetary Authority of Singapore.

Published

1 week ago

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24 September 2024

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SINGAPORE: Deputy Prime Minister (DPM) Gan Kim Yong will join the GIC board as a director starting on 1 October, according to an announcement from the sovereign wealth fund on Tuesday (24 September).

Mr Gan is also Singapore’s Minister for Trade and Industry.

His appointment adds to his extensive portfolio, which already includes his responsibilities as the Chairman of the Monetary Authority of Singapore (MAS) and his role overseeing the Strategy Group in the Prime Minister’s Office.

He is also a member of key national boards such as the Research, Innovation, and Enterprise Council and the National Research Foundation Board.

In a statement, Lim Chow Kiat, Chief Executive of GIC, welcomed Gan’s appointment, stating, “His wide-ranging experience will add valuable insights to important asset allocation and other strategic decisions.”

Lim expressed optimism about the contributions Gan will make to the board in shaping GIC’s investment strategies.

Gan’s career began in Singapore’s Civil Service, where he worked in the Ministry of Trade and Industry and the Ministry of Home Affairs.

In 1989, he transitioned to the private sector, joining NatSteel, a company that produces reinforcement steel products for the construction industry.

During his time at NatSteel, Gan rose to the position of Chief Executive Officer and President in 2005. His leadership at the company spanned several years, during which he contributed significantly to its development.

In addition to his corporate experience, Gan has had a distinguished political career.

He entered politics in 2001 and has since held various ministerial roles, including positions in the Ministry of Education, the Ministry of Manpower, and the Ministry of Health.

His leadership in these ministries contributed to Singapore’s policy development in areas ranging from workforce management to public health.

Gan holds both Bachelor’s and Master’s degrees in Engineering from Cambridge University.

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