Taken from KWSP Website:
The Employees Provident Fund (EPF) generated investment income of RM10.11 billion for the third quarter ending 30 September 2013 (Q3 2013), representing a healthy year-on-year growth of 44.00% compared with RM7.02 billion investment income generated in the corresponding quarter in 2012.
In a statement issued today on its unaudited investment results for the third quarter of 2013 (Q3 2013), EPF Chief Executive Officer Datuk Shahril Ridza Ridzuan said, “The performance is primarily driven by a more robust equity market on both domestic and foreign fronts, coupled with a significant rise in trading volume in the third quarter. We have also benefited from higher dividend payouts from listed companies due to improved earnings.”
Equities continued to generate a higher proportion of investment income in Q3 2013 amounting to RM5.71 billion or an increase of RM3.37 billion compared with RM2.34 billion recorded in the corresponding period in 2012. Meanwhile, investment income derived from Real Estate and Infrastructure assets surged from RM54.62 million in Q3 2012 to RM429.16 million in Q3 2013, continuing the growth in performance since Q1 2013.
The higher income from Equities helped offset a fall in income from Loans and Bonds, which was lower at RM2.28 billion compared with RM3.06 billion in the Q3 2012. This was reflective of the overall fall in yields for maturing assets that were reinvested. The higher Q3 2012 income was also due to one-off capital market transactions which were not repeated in Q3 2013.
Malaysian Government Securities and Equivalents in Q3 2013 posted RM1.55 billion in income, reflecting a nominal increase of 0.18 per cent compared with Q3 2012 while Money Market Instruments contributed RM145.23 million for Q3 2013 income.
“The EPF continues to diversify its investments across markets, sectors and asset classes to provide optimal sustainable returns in the long term. Our global investments offer stable returns on a long-term basis, befitting our risk-return appetite as a retirement fund. We are also able to find opportunities from, and reduce the risk of, asymmetric market movements, such as the improvement in global developed economies and the selldown in emerging market currencies,” Datuk Shahril said.
As at Q3 2013, the EPF’s total overseas exposure constituted 20.39 per cent of its total investment assets based on book value, registering a rise from 18.97 per cent in Q2 2013. During the quarter under review, an additional USD2.50 billion of overseas investments were made and of the total, USD2.25 billion had been channelled into global equity mandates and the balance invested in global bonds, infrastructure and private equities.
During the same quarter, the EPF also outsourced a further RM1 billion for domestic fixed income mandates.
Datuk Shahril added, “Currently, more than one third of EPF’s total investment assets are shariah compliant. The growth in Islamic finance assets globally presents us with the opportunity to further expand our investments into this space. This is also in line with the Fund’s diversification programme to continuously rebalance our portfolios according to our risk-return profile.
“Our efforts in shaping the Islamic finance industry have led us to be awarded the Best Institutional Solutions Provider in the Islamic Finance News (IFN) Islamic Investor Poll 2013. This is the second year in a row that EPF has received a major award in the Islamic Finance space.”
As at 30 September 2013, EPF’s investment assets increased by RM57.85 billion to RM568.04 billion from RM510.19 billion in Q3 2012. Total contributions of RM12.76 billion received in Q3 2013 exceeded the total amount withdrawn of RM8.85 billion, resulting in RM3.91 billion net inflows of funds for the quarter under review.
On the global economic outlook, Datuk Shahril said, “Even though we see signs of the global economy gradually improving, we remain concerned that the recovery is fragile, given ongoing policy and economic risks in the United States, Europe and China. The recently announced Budget 2014 is positive for the Malaysian economy and fiscal position as it clearly sets the agenda to restructure taxes and subsidies for long-term structural benefits and competitiveness. The EPF will continue with its policy of targeting real returns via prudent asset allocation and investment strategies.”