Singapore's GIC, one of the world's largest sovereign wealth funds that was set up to manage the country's foreign reserves, managed an average return of 7.8 percent annually in US dollar terms over the past 20 years, it said in its first performance report last September.

"The expected rates of return -- which are estimated of the average returns expected over the next 20 years -- reflected the GIC and Boards' assessment that the future investment environment is likely to be less benign than over the last 20 years," Tharman told parliament.

"The expected rate on GIC's overall portfolio also reflects the fact that it is now considerably more diversified across a range of risk assets than it was 20 years ago."

GIC's chairman Lee Kuan Yew told Reuters in an interview earlier this month that the fund's assets had slid 25 percent and it had rushed "too early" to invest in global banks.

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