EPF: RM108b outsourced to external fund managers as at end-2016

PETALING JAYA: A total of RM108 billion has been outsourced to external portfolio managers as at Dec 31, 2016, an increase of 10.36%, compared with RM97.86 billion in 2015, said the Employees Provident Fund (EPF).

This allocation, invested in both equity and fixed income instruments, represented about 14.77% of the EPF’s total investment assets, it said in a statement last Friday.

“As we gear up towards becoming a trillion-ringgit fund, we will continue to outsource a portion of our funds as part of our diversification initiative, and to suitably leverage on the knowledge and skillsets of external fund managers that complement our own internal fund management capabilities,” its chairman Tan Sri Samsudin Osman said.

“We will continue to increase our exposure in the markets we are investing in, especially in alternative investments and infrastructure.”

Samsudin said taking into account the prevailing market volatility and subdued growth, its expansion will be gradual and done in a prudent manner.

The EPF’s investment objective remains to declare no less than 2.5% nominal dividend on a yearly basis, and at least 2% real dividend on a three-year rolling basis.

With about 45% of investment assets being syariah-compliant prior to the launch of Simpanan Shariah in 2016, the EPF said it expects to grow these assets by at least RM25 billion a year on average to meet the demand of members.

Samsudin said the competition for high-quality Islamic assets is not only confined to investors in the Muslim world. Given their attractiveness as an alternative ethical financing tool, they are attracting Western pension funds as well.

The fund’s exposure to syariah-compliant investments covering multi-asset classes currently exceeds 40% of total assets. As at Dec 31, 2016, the fund’s total investment assets stood at RM731.11 billion, up 6.81% from RM684.53 billion a year before.