We are a year on, into the impact of the COVID-19 pandemic. Our world has changed as we lived in the shadow of this horrible virus.
The world now embarks on a new challenge of having the deal with new variants which can infect the population faster than we can get the world vaccinated.
With “business as usual” still a long way to go, coupled with the constant threat of global warming, the world will be challenged with having to transit towards a new norm while finding a way to be Earth-friendly.
Having summarised the challenges that the world faced over the past year, we now dive deeper into the performance of Temasek Holdings.
Temasek’s Portfolio Performance
Despite various challenges, Temasek announced that it closed the financial year ended 31 March 2021 with a Net Portfolio Value (NPV) of S$381 billion. This is an increase of S$75 billion when compared to Temasek’s portfolio in the year 2020.
Here are some takeaways from this announcement.
Temasek’s Portfolio Value of S$381 Billion
Temasek reports a net portfolio value (NPV) of S$381 billion for the financial year ended 31 March 2021.
Temasek also managed to achieve a One-Year Total Shareholder Return (TSR) of 24.53%. This is actually quite a good result given that we experienced a decrease in one-year total shareholder return (TSR) last year.
To give more context on this performance, the Total Shareholder Return (TSR) since 1974 was an annualised return of 14% compounded over 47 years; 20-year TSR was 8%, and 10-year TSR was 7%.
During the year, Temasek
- Invested S$49 billion
- Divested S$39 billion
Do note that TSR takes into account all dividends distributed to the shareholder, less any capital injections.
Temasek Portfolio vs Indexes Around the World
As usual, we look to compare the performance of the Temasek Portfolio with indexes around the world just to give a bit more context to the type of return Temasek is getting. We understand that it is not the most accurate comparison.
|Portfolio/ Indices||Performance over the last financial year|
|MSCI World Index||39.04%|
|MSCI Emerging Markets||40.90%|
|MSCI Asia ex-Japan Index||39.65%|
|MSCI Singapore Index||24.09%|
Do note that Temasek ultimately is neither a sovereign wealth fund nor a fund. It is a state-owned investment company and a provider of catalytic capital.
What Does Temasek’s Portfolio Look Like?
We take a look at Temasek’s portfolio to understand what did Temasek invest in, in order to drive that kind of return over the year.
Here’s a comparison of the sector allocation for Temasek’s portfolio in the year 2020 and 2021.
|Temsaek's Portfolio by Sector||2021||2020||Difference|
|Financial Services||24||23||Increase by 1%|
|Telecommunications, Media and Technology||21||21||No change|
|Transportation and Industrials||19||18||Increase by 1%|
|Consumer and Real Estate||14||17||Decrease by 3%|
|Life Sciences and Agri-Food||10||8||Increase by 2%|
|Multi-Sector Funds||8||8||No change|
|Others (including credit)||4||5||Decrease by 1%|
Notice the decrease in holdings in the Consumer and Real Estate sector, while increased in holdings in the Financial Services, Transportation and Industrials and Life Sciences and Agri-Food space.
When it comes to portfolio allocation geographically, we see a reduction in China and Australia & New Zealand of 2% and 1% respectively. Portfolio allocation in Americas increased by 2% while that in Europe, Middle East and Africa increased by 1%.
Temasek Net Portfolio Value Since Inception
If you are keen on finding out the progress of Temasek Net Portfolio Value since inception, here’s a quick illustration.