Malaysias EPF Total Investment Assets Near RM600 Billion The Employees Provident Fund (EPF) today announced that positive net contributions from members and employers as well as encouraging investment performance has increased its total investment assets to almost RM600 billion. As at 31 March 2014, the EPF’s investment assets jumped 11.27 per cent, an increase of RM60.47 billion, to RM597.02 billion from RM536.55 billion in the same corresponding period in 2013. In a statement today on the Q1 2014 investment results, EPF Chief Executive Officer Datuk Shahril Ridza Ridzuan said, “We remain focused on our objective to generate stable investment returns that consistently beat the rate of inflation. Based on the rapid growth in our investment assets, which average between 10 and 11 per cent annually, we will continue to strategically diversify our long-term investment activities across different markets and sectors in accordance with our Strategic Asset Allocation (SAA). “Depending on the market direction, we will continue to capitalise on opportunities that arise in order to rebalance our portfolios for risk and return optimisation.” For the first quarter ended 31 March 2014, the EPF generated an investment income of RM8.83 billion, compared with RM5.60 billion in the corresponding quarter in 2013. The more than 50 per cent increase in investment performance was primarily driven by returns derived from equity investments. The report also revealed that 52 per cent of EPF funds had been invested in secure and low risk fixed income instruments; 43 per cent in equity investment and the balance in money market instruments, real estate and infrastructure. Total overseas exposure constituted 21.22 per cent of total investment assets based on book value as at Q1 2014. Global investments remain an important source of diversification and returns for the EPF, and in the first quarter contributed about 27 per cent of all income generated. Datuk Shahril said, “The first quarter performed better than last year but may not be indicative of the full year performance for 2014. Economic and market situations play a major role in influencing investment performance. Our performance in Q1 2013 was affected by uncertainties ahead of the General Election 2013 and the early stages of global economic recovery had impacted our ability to achieve higher returns at that time. “Nonetheless, as a long-term investor, the EPF gives greater emphasis on optimising sustainable returns in the long run as opposed to just focusing on quarterly returns.” During the quarter under review, Equities emerged as the biggest contributor and played a significant part of the EPF’s portfolio, generating investment income of RM4.84 billion, compared with RM1.86 billion in Q1 2013. “Earnings on equities depend on market situations and in Q1 2014, the high trading volumes and liquidity in the equity markets, particularly global developed markets, provided us with a timely opportunity to realise gains from earlier equity investments. In addition, we also benefited from the steady stream of dividends received from the listed companies we invested in,” Datuk Shahril added. Real Estate and Infrastructure assets posted a double digit growth in income, up 37.41 per cent from RM227.19 million in Q1 2013 to RM312.19 million in Q1 2014. Income derived from Loans and Bonds in Q1 2014 increased RM86.69 million to RM2 billion, compared with RM1.92 billion in Q1 2013. The marginal increase in income was primarily due to maturing investments reinvested at lower rates given the low interest rate regime. In Q1 2014, income from Malaysian Government Securities and Equivalents was RM1.58 billion, up RM66.36 million compared with RM1.52 billion in the corresponding quarter in 2013, while Money Market Instruments contributed RM79.62 million in the quarter under review. Commenting on the outlook for the rest of the year, Datuk Shahril said, “Although we are optimistic that the Malaysian economy will record better growth this year on expectations of export recovery supported by resilient domestic demand, we remain vigilant, particularly over the uncertainties surrounding the movements of capital as long term interest rates adjust following recovery in key markets. “In order to optimise returns, we hold firm to our prudent and long-term investment approach. We will always ensure that preservation of capital and value enhancement of members’ savings remain as the Fund’s primary objective.” About the Employees Provident Fund (EPF) The Employees Provident Fund (EPF) is Malaysia’s premier retirement savings fund, providing basic financial security for retirement. The Fund is committed to preserving and growing the savings of its members in accordance with best practices in investment and corporate governance. It will always be guided by prudence in its investment decisions. As a customer-focused organisation, the EPF delivers efficient and reliable services for the convenience of its members and registered employers. The EPF continues to play a catalytic role in the nation’s economic growth, consistent with its position as a leading savings institution in Malaysia. Date: 26 May 2014
Posted on: Sat, 12 Jul 2014 05:12:37 +0000
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