If there is something we all like to hear, is for when our Employees Provident Fund or EPF to announce its healthy financial report which in return translates to…one: our savings are intact and two: we can expect a good yield come January 2022.
Thankfully we have some wonderful people managing our retirement savings, as the institution has recorded RM34.05 billion of total investment income for the first half of 2021 translating to an increase of RM6.79 billion, or 25%, compared to RM27.26 billion in the corresponding period in 2020.
EPF published its latest figures for the 2 quarters, while its total gross investment income for the second quarter was RM14.77 billion it was actually lesser by RM0.35 billion compared to RM15.12 billion recorded in the same quarter last year. But looking at the global landscape in volatility and domestic challenges, it must be commended on how the body navigated the situation.
As for performance, EPF states that equities continued to be the main contributor of income for Q2 2021 at RM7.89 billion, accounting for 53% of total gross investment income.
Looking after health of its portfolio, EPF did adopt cost write-downs on some listed equities. In Q2 this year, RM0.21 billion was written down for listed equities, compared to RM1.66 billion in the same quarter in 2020 following the continued recovery across global markets. After netting off these write-downs, a total of RM14.56 billion of investment income was recorded 8% higher than the RM13.46 billion recorded in Q2 2020.
EPF Chief Executive Officer Datuk Seri Amir Hamzah Azizan said, “The EPF delivered a resilient performance in 1H 2021 driven by the progressive recovery of the equity markets and most asset classes amid the global rebound.
“The accelerating roll-out of COVID-19 vaccines and the reopening of economies had supported a stronger performance for equities in the developed markets. However, equities in the emerging markets were more muted, due to the resurgence of COVID-19 in Southeast Asian countries and tighter regulations imposed by China authorities on several sectors that had triggered a sharp decline in stock prices.”
Fixed Income instruments continued to contribute a stable income of RM5.28 billion, or 36%, to the gross investment income in Q2 2021. This was lower compared to the RM6.17 billion recorded in Q2 2020 due to lower trading gains. This is in line with higher interest rates in Q2 2021, compared to the corresponding period last year.
Real Estate and Infrastructure, and Money Market instruments, meanwhile, recorded RM1.40 billion and RM0.20 billion respectively.
The EPF’s diversification into different asset classes, markets and currencies continued to provide income stability and added value to its overall return. As at end June 2021, the EPF’s investment assets stood at RM989.14 billion, of which 37% was invested overseas. In Q2 2021, overseas investments generated an income of RM8.71 billion, 59% of the total gross investment income recorded.
Its the governance at EPF that allowed it to assist members affected by the pandemic, this year it introduced i-Sinar and i-Citra facilities which were intended to provide financial relief to pacify these trying times. To date, this exercise has involved the disbursement of a total of RM67.6 billion:
|Facility||No. of Applicants (million)||Amount approved (RM billion)||Amount disbursed (RM billion)|
About 89% of applicants under i-Sinar and 86% under i-Citra stated that the withdrawals were used for daily expenses or urgent financial needs. A clear indication on how important a role the institution is playing in the country’s recovery agenda.