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KUALA LUMPUR: The Employees Provident Fund (EPF), which has recorded a gross investment income of RM50.88 billion in 2018, said that public equities and foreign investments will continue to be the main income driver for the retirement savings fund.
Equities contributed about 58% to its total income last year, while a further 40% was derived from overseas investments.
Speaking at a press briefing on the fund’s 2018 financial performance today, EPF CEO Tunku Alizakri Alias said that at this point of time, EPF still believes that equity is the type of asset class that is able to enhance the value of its members’ funds.
“Don’t think that just because the markets are bad, it is necessarily a bad thing. Don’t forget that uncertainty is both opportunity as well as a threat. Because we are a long-term fund, when the market is down, that is the time when we start hunting,” he added.
On its plan to increase the allocation of private equity (PE) investments from the current 2% to over 3% of its total strategic asset allocation over the next 10 years, he said it is still growing with the ones that it is comfortable with such as infrastructure and buildings – which are relatively safe.
Alizakri noted that it is not the time to be “too adventurous” in view of un-certainties it sees this year, including the longstanding US-China trade war, US interest rate increases and Brexit.
“Let’s stick to what we know. It is going to be challenging this year, so for PE, we most likely will still be steering the same course but our size is getting bigger so we will need to look at new PE partners to work with as well,” he said.
Alizakri also said the fund will be reviewing its strategic asset allocation this year, which is normally done on a three-year basis to evaluate its investment strategies.
Last Saturday, EPF declared a dividend rate of 6.15% for conventional savings with a payout amounting to RM43 billion; and 5.9% for syariah savings, with a payout amounting to RM4.32 billion.
In total, the payout for 2018 amounts to RM47.31 billion, a marginal decrease of 1.7% from 2017.
EPF has about RM222.61 billion worth of investments across 40 countries and 28 currencies, representing about 26.7% of its total portfolio. The fund is set to grow its current assets under management from RM833.76 billion to RM1 trillion in the next few years.
