KUALA LUMPUR: The Employees Provident Fund (EPF) recorded a gross investment income of RM19.29bil in the first quarter ended March 31, despite uncertainties from Covid-19.
In a statement Tuesday, the retirement fund said equities registered RM14.28bil in income during the quarter, accounting for 74% of total gross investment income, while fixed income instruments continued to contribute a stable income of RM3.92bil.
Income from real estate and infrastructure, as well as money market instruments, contributed RM710mil and RM380mil, respectively.
It said after the cost write-down on listed equities, which was a prudent measure practiced by the EPF to ensure that its long-term investment portfolio remains healthy, the fund recorded a net investment income of RM19.24bil.
“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,” CEO Datuk Seri Amir Hamzah Azizan said.
He said inflationary concerns did not derail the positive trend in the equity markets, and the EPF took advantage of the opportunity to reposition holdings in stocks that were fundamentally strong but undervalued.
The EPF’s investment assets stood at RM981.71bil as at end-March 2021, of which 36% was invested overseas. The diversification in different asset classes, markets, as well as currencies, continues to provide income stability and added value to the fund’s overall returns.
During the first quarter, its overseas investments generated an income of RM11.15bil, or 58% of the total gross investment income recorded, mainly driven by foreign equities.
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.
The portfolio reflects the EPF’s diversification strategy to optimise returns within tolerable risk limits as guided by the Strategic Asset Allocation (SAA).
To date, a total of RM57.97bil of i-Sinar withdrawals have been approved for 6.49 million applicants, out of which RM50.93bil have been disbursed, while RM20.80bil has been paid out to 5.27 million members under the i-Lestari facility.
Amir said EPF’s disciplined investment approach and robust liquidity management guided by the SAA has been successful in minimising the impact of the substantial disbursements on the EPF’s portfolio, allowing it to sustain a steady performance in trying times.
“This reflects the fund’s commitment to safeguarding our members’ retirement savings by preserving and enhancing the value of those savings while ensuring that their short-term needs are met without compromising their long-term interests,” he said.
“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.”