Malaysia’s EPF posts 58% growth in Q1 gross investment income

EPF Employees Provident Fund

Malaysian pension fund Employees Provident Fund (EPF) has recorded a 58% growth in gross investment income at 19.29 billion ringgit ($4.68 billion) for the first quarter ended March 31, 2021, against 12.16 billion ringgit ($2.95 billion) in the corresponding period last year.

The fund, however, maintains a “cautious” stance for the coming quarter amid the downside risks due to the new infectious Covid-19 variants.

“EPF’s solid performance for the first quarter was a spillover from the global economic recovery that began in the second half of last year. We believe that the vaccination rollouts, as well as supportive fiscal and monetary policies worldwide, will play a key role in facilitating economic activities and growth,” EPF Chief Executive Officer Amir Hamzah Azizan said.

“The inflationary concerns did not derail the positive trend in the equity markets, and we took advantage of the opportunity to reposition our holdings in stocks that are fundamentally strong but undervalued,” he added.

According to an EPF statement, equities registered 14.28 billion ringgit ($3.46 billion) in income during the first quarter, accounting for 74% of total gross investment income, while fixed income instruments continued to contribute a stable income of 3.92 billion ringgit ($0.95 billion). In 1Q 2020, equities posted an income of 6.32 billion ringgit.

Meanwhile, income from real estate and infrastructure, as well as money market instruments, stood at 0.71 billion ringgit ($0.17 billion) and 0.38 billion ($0.09 billion) ringgit respectively. Real estate and infrastructure income stood at 0.43 billion ringgit in the same period last year.

After the cost write-down on listed equities, the fund recorded a net investment income of 19.24 billion ringgit ($4.67 billion) against 7.50 billion ringgit ($1.82 billion) in the corresponding period last year.

“While the EPF remains cautious for the coming quarter, given the downside risks of the new highly transmissible COVID-19 variants, we assure members that we continuously take the necessary measures to protect members’ savings, supported by our strong governance framework, as we strive to meet our mandate and strategic targets of providing members with a sustainable retirement,” Amir said.

Asset diversification

EPF’s investment assets stood at 981.71 billion ringgit  ($239.69 billion) as of end-March 2021, of which 36% was invested overseas.

The diversification in different asset classes, markets, and currencies continues to provide income stability and added value to the fund’s overall returns. During the first quarter, the EPF’s overseas investments generated an income of 11.15 billion ringgit ($2.71 billion), or 58% of the total gross investment income recorded, mainly driven by foreign equities, the fund said.

By asset class, fixed income instruments made up 46% of investments while equities comprised 44%. money market instruments and real estate and infrastructure made up 4% and 6% respectively of investments, EPF said.

The portfolio reflects the EPF’s diversification strategy to optimise returns within tolerable risk limits as guided by the Strategic Asset Allocation (SAA), which has proven to be resilient in the face of any challenging market environment, especially during the COVID-19 pandemic crisis.

Recognising the challenges faced by members during the pandemic, the EPF’s i-Sinar and iLestari facilities were introduced to allow affected members to make withdrawals that would help provide some measure of financial relief.

To date, a total of 57.97 billion ringgit ($14.06 billion) of i-Sinar withdrawals have been approved for 6.49 million applicants, out of which 50.93 billion ringgit ($12.53 billion) have been disbursed, while 20.80 billion ringgit ($5.05 billion) has been paid out to 5.27 million members under the i-Lestari facility.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.