Janus Welcomes GIC’s Adherence to a 20-year Investment Time Horizon

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Janus Corporate Solutions welcomes Singapore’s efforts to boost competitiveness by adhering to a 20-year investment time horizon.

Singapore Company Incorporation

Building up reserves takes time and judiciously investing them in the right assets is key to a country as small as Singapore.

The Government of Singapore Investment Corporation (GIC), has reiterated the 20-year period as the most suitable time horizon to measure asset performance. Janus Corporate Solutions, a leading Singapore company incorporation agency and the parent of http://www.GuideMeSingapore.com, welcomes the affirmation that was published in the recently released 2010/2011 Report on the Management of the Government's Portfolio. Janus also accepts the strategy as a way by which Singapore will maximize its returns and consequently boost the economy’s competitiveness.

As a key national reserves manager, the GIC has steadily worked towards achieving high long-term returns and growing Singapore’s reserves by making prudent investments in assets that have good value and strong long-term growth potential. GuideMeSingapore.com’s analysis shows that the GIC invests in liquid assets such as infrastructure and natural resources as well as illiquid ones such as real estate and private equity. Therefore, it is only pragmatic that assets be accorded a long-term time horizon to realize their potential and correspondingly, produce better returns over time.

Commenting on the strategy, Ms. Jacqueline Low, the Director of Janus Corporate Solutions said, “Building up reserves takes time and judiciously investing them in the right assets is key to a country as small as Singapore. A country that has a healthy pool of reserves secures two things. In the short term, it ensures a steady flow of income that enables a country as small as Singapore to tide challenging economic times. In the long term, it demonstrates an economy’s ability to keep up a healthy and lasting track record. This is therefore conducive for business and gives entrepreneurs and investors ample reason to form a company in Singapore. The presence of a more robust and colorful business landscape in turn ensures that future generations in Singapore have a stronger foundation to build up and transform Singapore’s economic landscape.”

Further analysis by GuideMeSingapore.com shows that a 20-year period is more pragmatic for GIC investments as it is a more reliable grounding to make or sell assets. A 20-year time horizon includes many business cycles and its ups and downs. However, it also allows decision makers to look beyond the minutiae of various and inevitable short-term fluctuations that happen on a year-to-year basis. Therefore, contrary to the view that 20 years will allow fund managers to mask bad asset performance, having a long-term approach allows fund managers to avoid force-buying or force-selling based on short term returns. Additionally, a long-term approach takes global inflation out of the equation, allowing the GIC to calculate the real rate of returns over 20 years. The GIC’s 20-year real rate of return was 3.8% in March 2010. This year, the GIC’s 20-year annualised real rate of return has improved to 3.9% due to an ongoing recovery of the equity markets.

“GIC’s announcement to continue with the 20-year investment time horizon comes on the back of International Enterprise Singapore’s recent announcement to groom as many as 1,000 high-potential Singapore companies to better compete in the global arena. Altogether, they reflect Singapore’s prudent jurisdiction and a resounding commitment to secure the national and economic well-being for current and future generations,” Ms. Low added.

About Janus Corporate Solutions Pte Ltd

Janus Corporate Solutions Pte Ltd is a Singapore-based firm that provides quick and cost-effective Singapore company formation services to small and mid-size businesses worldwide.


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