Reserve Management

Size and Composition of OFR

• The OFR is invested in a well-diversified portfolio of cash, bonds and equities that aim to provide good long-term returns while being resilient across market conditions. 
• The portfolio is also diversified across advanced and emerging market economies, and across different currencies.
• Investment-grade bonds in the advanced economies form the largest allocation in the portfolio. About three-quarters of the OFR are denominated in US Dollar, the Euro, Japanese Yen and Pound Sterling, with US Dollar forming the bulk.

Investment Performance 

• The investment performance of the OFR over the past 10 years is shown in Chart 1.
• The gains/losses as represented by the dark red lines, comprise investment gains/losses (blue bars) and currency translation effects (brown bars).
• In FY2020/21, the total gain was S$8.2 billion, comprising investment gains and negative currency translation effects.
• MAS recorded an investment gain of S$22.8 billion as global markets recovered strongly during the financial year. The investment gain was mainly from interest income and realised capital gains. 
• Negative currency translation effects totalled S$14.6 billion due primarily to the strengthening of the Singapore Dollar against the US Dollar and Japanese Yen.

Chart 1: Gains/Losses of OFR

Risk Management 

• The MAS Board approves the investment universe and risk management framework.
• Investments are subject to risk limits and controls, and MAS conducts stress tests regularly to manage financial risks. 
• MAS monitors investment risks closely and reports them regularly to the MAS Board and Risk Committee.
• Amid the COVID-19 crisis, MAS conducted additional investment risk analysis and stress tests to ensure that MAS’ portfolio remained resilient to stressful market conditions.