Equity, overseas investments main drivers for EPF income

Worrying trend: The EPF building in Kuala Lumpur. The fund says many Malaysians do not have enough wealth for their retirement years.

KUALA LUMPUR: The Employees Provident Fund has recorded RM50.88bil in gross investment income last year, registering a 10-year compound annual growth rate (CAGR) of 10.26%.

EPF CEO Tunku Alizakri Alias said on Monday equities remain the main driver at 58% of the amount. Out of the RM50.88bil, 40% of the income generated are from overseas investments in 40 countries and 28 currencies.

"At a growth rate of 10.26%, we have to get out of Malaysia because we are outgrowing the country's growth rate. Malaysia is now too small for us so we cannot just put all our money in one basket, no matter how wonderful this basket is.

"We have over RM222bil in our funds invested overseas, representing around 26.7% of our total assets," he said at a media briefing on EPF's 2018 performance here.

On Saturday, EPF declared a dividend rate of 6.15% for conventional savings, with a payout amounting to RM43bil. It also declared a 5.9% dividend rate for syariah savings, with a payout amounting to RM4.32bil. The total payout for 2018 was RM47.31bil, a marginal decrease of 1.7% from 2017.

He added that EPF's performance was consistent with the market, with incomes of RM12.877bil in the first quarter, RM12.385bil in the second quarter and RM14.614bil in the third quarter.

"The bloodbath began in Q4 when we recorded around RM10.9bil. But that is still quite an achievement considering how bad things were performing at the end of Q4.

"We had an interesting roller coaster of a ride for 2018. Domestically we had the 14th General Election and the uncertainties associated with it and globally, we have the US interest rate hikes, the China-US trade war and Brexit," he said.

As for 2019, EPF expects uncertainty to continue ans as US and China beginning to record slower growth, Asean - which is still seen as an emerging market - provides a safer haven for investments.
The EPF is also keen on Latin America