Calculating SGS Returns

There are a few ways to calculate the returns from investing in bonds: capital and interest gains, current yield, and yield-to-maturity. You can use the bond calculator to calculate yield-to-maturity, which is the most widely used return measure.

View Your Holdings

As Singapore Government Securities (SGS) are scripless, they are held as entries in your CDP account.

The CDP will send you regular account statements with details on your SGS holdings and any principal or interest payment received.

Check SGS Prices

SGS prices may go up or down according to market conditions, although you will always receive the face (par) value at maturity.

You can monitor the performance of your SGS by:

Calculating Bond Returns

There are a few ways to calculate how much return you are getting from your SGS bonds.

Capital and Interest Gains

Use for: A simple way to count your gain or loss from your initial investment.

How to measure: Sum of capital and interest gains as a percentage of the purchase price.

Example

If you bought a 10-year bond paying 4% coupon with a face value of S$100, you will receive semi-annual interest of:

(S$100 x 0.04 /2) = S$2

Assume that you bought the bond at a primary auction at S$100 and sold it one year later. Depending on the price, the return will be as follows:

Price Calculation Capital and interest gain
S$102 (102-100)+4/100 *100 6%
S$98 (98-100)+4/100 *100 2%

If the bond was a reopened bond instead of a new issue, it might have a different selling price from its face value.

Assuming you bought the bond at a price of S$105 and sold it a year later at $103, the return would be:

(103-105)+4/105 *100 = 1.90%.

Current Yield

Use for: Measuring annual returns. It allows you to estimate the return from investing in this bond versus other bonds on the market.

How to measure: Annual interest as a percentage of current market price.

Example

For a 10-year bond with a 4% coupon, the current yield may be above or below the coupon depending on the current market price:

Current market price Calculation Current yield
S$98 (4 / 98 x 100%) 4.08%
S$102 (4 / 102 x 100%) 3.92%
Yield to Maturity

Use for: Estimating your returns should you hold your SGS bond to maturity. Use yield to maturity (YTM) to compare the profitability of bonds with different maturity periods.

YTM is the most widely used return measure in the bond market. It measures the total return generated from holding the bond to maturity, including the coupon income, the capital gain or loss, and returns from reinvesting all coupon payments.

It is thus a more thorough way to calculate your returns from a bond.

How to measure: Use the bond calculator to calculate the yield to maturity of your bond.

Calculating T-bill Returns

T-bills do not have coupon payments; instead, they are issued at a discount. Therefore, the yield that you get at maturity is the difference between the purchase price and the face value.

Example

If you pay S$95 for a 1-year T-bill with a face value of S$100, your yield is:

(S$100-S$95) / 95 x 100 = 5.26%