The Employees Provident Fund (EPF) recorded a gross investment income of RM19.29 billion for the first quarter ended 31 March 2021, despite the continued uncertainties from the ongoing Covid-19 pandemic.
Equities registered RM14.28 billion in income during the quarter, accounting for 74 percent of total gross investment income, while Fixed Income instruments continued to contribute a stable income of RM3.92 billion. Income from Real Estate and Infrastructure, as well as Money Market instruments, came in at RM0.71 billion and RM0.38 billion respectively.
After the cost write-down on listed equities, which is 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 RM19.24 billion.
EPF Chief Executive Officer, Amir Hamzah Azizan, said, “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.”
“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.
EPF’s investment assets stood at RM981.71 billion as at end March 2021, of which 36 percent 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 RM11.15 billion, or 58 percent 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), 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 i-Lestari facilities were introduced to allow affected members to make withdrawals that would help provide some measure of financial relief. To date, a total of RM57.97 billion of i-Sinar withdrawals have been approved for 6.49 million applicants, out of which RM50.93 billion have been disbursed, while RM20.80 billion has been paid out to 5.27 million members under the i-Lestari facility.
Amir said, “Our 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 these 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.”
“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.”