PETALING JAYA: The Employees Provident Fund (EPF) said that a total of RM108bil had been outsourced to external portfolio managers at as Dec 31, 2016, an increase of 10.36%, compared with RM97.86bl in 2015.
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 release.
“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,” the EPF’s 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.
“However, taking into account the prevailing market volatility and subdued growth, our expansion will be gradual and done in a prudent manner,” he added.
The EPF also said it will continue to pursue asset diversification to mitigate portfolio risks and would like to increase exposure into alternative investments to 10% of its total assets under management.
It also reiterated its objectives to declare no less than 2.5% nominal dividend on a yearly basis, and at least 2% real dividends on a three-year rolling basis.
It said that with about 45% of investment assets being Shariah-compliant prior to the launching of Simpanan Shariah in 2016, the EPF now expects to grow these assets by at least RM25 billion a year on average to meet the demand of its members.
“The EPF needs more quality Islamic assets to invest in, and we welcome external managers to join us in our commitment to growing our Shariah mandate,” Samsudin said.
The EPF also noted that been a signatory to the Malaysian Code for Institutional Investors earlier this year, which is a testament to its commitment to promoting investment best practices and strong corporate governance among its investee companies.
Its exposure to syariah-compliant investments covering multi-asset classes currently exceeds 40% of total assets.
As at Dec 31, 2016; its total investment assets rose by 6.8% to RM731.1bil from RM684.5bil in the previous year.
“The EPF sets high standards on performance and we appreciate the hard work of our external fund managers, who have shown full commitment in managing our funds,” he added.