EPF reports higher investment income of RM14.61b in Q3

The EPF reassured its members that it has a strong and robust governance framework in place to prevent fraud on its members

KUALA LUMPUR:  The Employees Provident Fund's (EPF)  total investment income in the third quarter ended Sept 30, 2018 rose to RM14.61bil, with equities accounting for the main revenue driver.

The retirement fund said on Wednesday the income was up 12.82%  from RM12.95bil a year ago.

In Q3 2018, equities, which made up 40.67% of the EPF’s total investment assets, have continued to be the main revenue driver.

Equities contributed RM8.89bil or 60.81% of total investment income, for the quarter. During the quarter, dividend income had enhanced the performance of the domestic equity portfolios.

EPF deputy chief executive officer (investment) Datuk Mohamad Nasir Ab Latif said: “Q3 2018 saw us navigating a volatile market condition, which has been fuelled by the trade tensions between China and the United States. 

“However, we have been able to record an improvement in income as Malaysia and Asean equities recovered in Q3 2018 from the market downturn experienced in previous quarters, while developed market equities continued to record positive growth from previous quarter,” it said.  

“Volatility is increasingly felt across the region, in which we saw a decline in regional equity markets in the fourth quarter of 2018. This will certainly pose a huge challenge to the EPF to sustain the same income momentum for the fourth quarter.” 

A total of 50.72% of EPF’s investment assets were in fixed income instruments, which continue to provide consistent and stable income, reduce overall risk and protect against volatility of the EPF’s portfolio, in line with the EPF being a balanced fund. 

The third quarter saw fixed income investments recording an income of RM4.73bil, equivalent to 32.40% of the quarterly investment income. Income from Malaysian Government Securities (MGS) & Equivalent in Q3 2018 increased to RM2.50bil. Loans and Bonds generated an investment income of RM2.24bil. 

During the quarter, real estate & infrastructure recorded RM726.23mil in investment income, an increase from RM91.73mil a year ago. The marked increase was due to higher dividend income, compared with the same period last year. 

Investments in money market instruments, which represent 3.92% of the total investment assets, contributed RM265.39mil to the investment income. 

Investment in this asset class, which includes treasury bills, commercial papers, short-term certificates of deposit, repurchase agreements, etc., provides regular income payments and is vital in meeting the EPF’s short-term liquidity needs. 
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