It does this by monitoring the concentration risks in the whole portfolio of assets invested by Temasek Holdings, the Government of Singapore Investment Corporation (GIC) and Monetary Authority of Singapore (MAS).
But Mrs Teo added the Government does not decide on how each investment entity manages its own portfolio, saying that their respective boards and professional management teams are responsible for those decisions.
She reassured that risks to the portfolio is not excessive as the Ministry of Finance assesses the impact of various adverse global scenarios, across medium to long-term time-frames.
Earlier, MP for Ang Mo Kio GRC Mr Inderjit Singh Ang Mo Kio GRC raised the concern that GIC and Tesmasek Holdings are investing in very similar assets.
He cautioned that it is not a good trend as the two sovereign wealth funds are supposed to target different types of investments.
He said: "We may be overinvesting and lack diversification in our investments, which could come back and haunt us doubly hard if these sectors are hit by problems.
"We have seen this when we were hit by a number of investments in financial institutions by both entities."
He called for greater coordination between the two, by having the Ministry of Finance play a more active role in coordinating their investment philosophies.
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