EPF posts investment income of RM11.41 bln for Q215

The Employees Provident Fund (EPF) registered an investment income of RM11.41 billion for the second quarter of 2015 (Q215) ended June 30.

This was a year-on-year growth of 9.73 per cent, compared with the RM10.40 billion recorded in the corresponding quarter of 2014.

In respect of the first half cumulative year-to-date, the EPF recorded RM22.04 billion, a 14.60 per cent increase, compared with the same period in 2014 of RM19.23 billion.

As at Q215, the EPF’s total investment assets stood at RM667.21 billion, an increase of RM30.68 billion for the first six months of 2015, it said in a statement here.

During the quarter under review, equities, which made up 43 per cent of the Fund’s total investment assets, continued to emerge as the top investment income contributor of RM6.97 billion, representing 61.05 per cent of total income.

This was 6.90 per cent higher compared with RM6.52 billion recorded in the same corresponding period in 2014.

Fixed Income investment, which represents 51 per cent of EPF’s investment asset size, continued to provide a steady stream of income, amid the low interest rate environment and uncertainties in investment markets.

Meanwhile, Malaysian Government Securities generated RM1.79 billion in income during Q215, up 3.98 per cent or RM68.44 million, compared with RM1.72 billion in the same corresponding period of 2014.

Loans and bonds recorded an investment income of RM2.02 billion against the RM1.87 billion in Q214, while money market instruments contributed RM190.89 million in income.

Real estate and infrastructure represented three per cent of EPF’s total investment assets as at June 2015.

Income recorded for the quarter under review was RM444.46 million, compared with RM184.12 million in the same quarter in 2014.

"Despite the very challenging conditions, our performance for the first six months of 2015 was strongly supported by our well diversified portfolio and the strengthening of the US dollar also enhanced returns from our international investments," said Chief Executive Officer Datuk Shahril Ridza Ridzuan in the statement.

As at June 2015, EPF’s global investments made up 25 per cent of total investment assets and contributed more than 40 per cent to the fund’s total cumulative year to date income.

"While able to maintain the previous quarter’s momentum, we are currently seeing greater volatility in the financial markets.

"The anticipation of an interest rate hike in the United States as well as the economic slowdown in China and other emerging countries are the prevailing concerns," Shahril Ridza added.

He said it would be challenging for the EPF to sustain the first half’s momentum for the remaining part of the year.

According to Shahril, the current market conditions allowed the fund to rebalance its portfolio for continuous returns and risk diversification over the long run.

"With our long term investment horizon, the current situation presents good opportunities for us to capitalise on undervalued and fundamentally strong domestic and global assets," he said.