EPF will increase its investments in domestic asset classes this year

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KUALA LUMPUR: The Employees Provident Fund (EPF) intends to increase investments in various domestic asset classes in 2022 in line with the reopening of economies and businesses in the country.

Managing Director Datuk Seri Amir Hamzah Azizan said as a major investor in Malaysia’s financial markets, it would help catalyze economic activity and help the economy recover.

“We believe that the reopening of economies and businesses, as well as various initiatives under the National Economic Recovery Plan, would provide fertile ground for EPF to increase the effectiveness of its investments and take advantage of the opportunities a recovery,” he said at a press briefing. on ETH 2021 financial performance here, today.

Amir Hamzah said internal EPF data assumed the labor market was recovering, with data on dues, member registrations and active employers all returning to pre-pandemic levels in the fourth quarter of 2021.

“With the reopening of international borders and some of the best vaccination rates in the world, Malaysia is poised to rebound in 2022,” he said.

For 2021 performance, Amir Hamzah said the continued market recovery, particularly in developed markets, has helped EPF’s listed equity portfolios, providing it with opportunities to make profits.

“Equities, especially overseas listed stocks, which recorded a return on investment (ROI) of 10.44%, continued to drive returns. The total income contributed by the asset class shares amounted to RM38.93 billion or 58% of EPF’s total gross income.

“The private equity portfolio also showed strong performance, recording a return on investment of 19.01%,” he said.

With almost half of the ETH’s total asset allocation in fixed income instruments, comprising Malaysian government securities and equivalents, as well as loans and bonds, he said the pension fund was in able to maintain stable returns. Portfolio income contributed RM19.50 billion or 29% of EPF’s total gross income.

Meanwhile, Amir Hamzah said ETH’s overseas assets were key contributors to overall performance, where different asset classes, markets and currencies ensured income stability and added value to performance. overall retirement fund.

“As of December 2021, around 37% of EPF’s investment assets were outside of Malaysia across all asset classes,” he said.

Overall investment assets increased by 0.8% to RM1.01 trillion from RM1.0 trillion in 2020, while the membership base in December 2021 increased by 2.0% to 15 .2 million, while employers registered with the EPF stood at 553,000.

With a three-year average real dividend after adjusting for inflation of 4.91% for Simpanan

Konvensional, and 4.51% for Simpanan Shariah, he said the EPF had exceeded its strategic target

to declare an average effective dividend of at least 2.0% on a three-year rolling basis.

“The dividend payment for each savings was derived from the total realized gross income for the year after deducting net depreciation of financial assets, depreciation of costs on listed shares, unrealized losses due to the exchange rate and derivative prices, capital expenditure, operating expenditure, statutory charges, as well as the dividend on withdrawals,” he added.

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