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Investment performance of Temasek Holdings
24 Feb 2021 (209 views)

I have read many online posts that criticized Temasek Holdings for speculative and bad investments. 

I do not agree with most of these posts.

It is not fair to pick a bad investment and to criticize Temasek Holdings on that investment. As a large fund, TH has to invest in many stocks. Some will perform well while others will perform badly. It is not correct to pick one stock and pass a judgment based on that one stock.

One should judge the performance of TH based on the performance of the entire portfolio, comprising of all of their investments, and compare them with other sovereign funds. 

I am not able to express any view on the overall performance of TH, because I did not study it in detail. 

I also understand that some of the investments were passed from the government to TH at book value, when the market value was considerably higher. This boosted the performance of TH artificially, and in a manner that other funds do not enjoy. I do not know the extent of this practice, but I suspect that it did occur.
 
I wish to make an observation about the investment strategy of TH as reported in an interview given by the incoming CEO, Dilhan Pillay. 

The new CEO said that TH now has a large holding of China stocks, which now exceed the holdings of Singapore stocks. 

I agree with this strategy. I have found recently that the China stocks are generally undervalued and they have good earnings and dividend yield.



Investment performance of Temasek Holdings
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I have read many online posts that criticized Temasek Holdings for speculative and bad investments. 

I do not agree with most of these posts.

It is not fair to pick a bad investment and to criticize Temasek Holdings on that investment. As a large fund, TH has to invest in many stocks. Some will perform well while others will perform badly. It is not correct to pick one stock and pass a judgment based on that one stock.

One should judge the performance of TH based on the performance of the entire portfolio, comprising of all of their investments, and compare them with other sovereign funds. 

I am not able to express any view on the overall performance of TH, because I did not study it in detail. 

I also understand that some of the investments were passed from the government to TH at book value, when the market value was considerably higher. This boosted the performance of TH artificially, and in a manner that other funds do not enjoy. I do not know the extent of this practice, but I suspect that it did occur.
 
I wish to make an observation about the investment strategy of TH as reported in an interview given by the incoming CEO, Dilhan Pillay. 

The new CEO said that TH now has a large holding of China stocks, which now exceed the holdings of Singapore stocks. 

I agree with this strategy. I have found recently that the China stocks are generally undervalued and they have good earnings and dividend yield.