Malaysia’s largest pension fund, the Employees Provident Fund (EPF) plans to launch its first fully shariah-compliant fund by January 2017 with an initial fund size of up to MYR120 billion ($29.27 billion).
The pension fund’s total investment assets grew to MYR667.56 billion ($162.84 billion) as at September last year, with its total income for the first nine months of last year amounting to MYR31.58 billion ($7.7 billion).
In its portfolio mix, 51 per cent of it comprise of fixed income investments, while 43 per cent is from equities. The remainder is for real estate and infrastructure as well as other investments.
As at Dec 31, 2015, about 40% of its total investments were shariah-compliant.
Interested members may convert their savings to full shariah compliance status on a first come first serve basis, deputy chief executive officer of investments Mohamad Nasir Abdul Latif told a media briefing on Thursday.
In a previous statement, the fund had announced plans to introduce a shariah-compliant option to members by 2017, having ascertained that there is a sufficient supply of shariah-compliant assets in the market.
The fund also plans to dispose its stake in blue chip counter British American Tobacco at the right price, Latif said. It currently holds a 6.7 per cent direct stake in the tobacco firm and owns 0.7 per cent via an external fund manager.
“EPF has historically never invested in gambling stocks or alcohol stocks. In fact, we no longer invest in tobacco stocks. We kept what we had (invested in the past) and at the right time we will exit (from) it,” he said, noting that when the fund sees that the stock has reached its full potential and the price is right, it will dispose its stake.
On the disposal of assets in the United Kingdom, he said EPF has found a suitor for the office buildings it still owns in London.
Latiff added that, even then, EPF was not in a rush to dispose them.
“We are getting good rental income from the properties. But, off course if somebody comes and makes us an irresistible offer (price), I am going to take it and invest the proceeds somewhere else,” he said.
Last year, EPF sold the ‘One Sheldon Square’ office building in London for MYR1.14 billion.