According to EPF deputy CEO (investment) Datuk Mohamad Nasir Ab Latif, Malaysia experienced a market downturn along with the rest of Asean due to the escalating US-China trade tensions and US interest rate hike.
“While some developed markets, including the US and Eurozone countries, recorded gains in their equity markets, the emerging markets, which include Asia, recorded negative returns. As ASEAN was one of the worst performer, Malaysia was not excluded from the market downturn.
"Nonetheless, the diversification into different markets and sectors has enabled the EPF to record consistent performance with equities emerging as the main contributor during the second quarter," he said in a statement issued on Wednesday.
He added that global market uncertainty will continue to shroud the outlook for 2018 with given impending changes to monetary policies, uncertainty over the outcome of the Brexit and ongoing global trade tensions.
"On the domestic front, the outlook is likely to turn favourable with easing foreign outflows and clearer policy direction from the new Government. The EPF remains focused in delivering
above-inflation returns, with at least two (2) per cent above the inflation rate over a three-year rolling period, which will preserve and enhance the value of our members’ retirement savings.”
In Q2, equities, which make up 40.61% of the EPF's total investment assets contributed RM7.98bil or 64.44% of total investment income.
Fixed income instruments, making up 52.09% of the EPF's investment assets, contributed RM4.09bil or 33.07% of the quarterly income.
Malaysian government securities (MGS) and equivalent rose to RM2.4bil in Q2 while loans and bonds generated an investment income of RM1.7bil.
Real estate and infrastructure generated RM91.73mil in investment income.
The EPF's investment assets edged up 0.38% or RM3.05bil from Dec 31, 2017, but slipped marginally from the first quarter of 2018 due to the drop in equity markets.
"Notwithstanding the quarterly decline, the EPF’s asset position remains healthy compared to members’ savings balance of RM780.07 billion. Out of the total investment asset, RM322.89 billion, or 39.71 per cent, were in Shariah-compliant investment while the balance were invested in the conventional portfolio," said Mohamad Nasir.
RM1.09bil of the RM12.39bil gross investment income was generated for Simpanan Shariah and RM11.3bil for Simpanan Konvensional.
During the quarter under review, the EPF's overseas investment amounting to 26.5% of its total investment assets contributed 38.3% to the total investment income.
Did you find this article insightful?