Portfolio diversification to boost EPF's dividend

Portfolio diversification strategy planned by the Employees Provident Fund (EPF) is seen as the best way forward to guarantee strong cash flow and consistent returns this year.

Aberdeen Islamic Asset Management Investment Manager Hasif Murad said the changes in strategy was much needed by the fund amidst the current economic and markets volatility environment.

“EPF successfully managed dividend expectations. If we look at other peers such as Permodalan Nasional Berhad (PNB) and Tabung Haji (TH), they have also announced lower dividends.

“This has set the members to expect lower return for this year,” He said in a phone interview with Astro AWANI.

On Monday, EPF Chief Executive Officer Datuk Shahril Ridza Ridzuan said the fund would be focusing on private assets such as infrastructure, private equity and properties in order to gain consistent returns.

However, Hasif said even though private assets have less liquidity as compared to fixed income portfolios, EPF would surely secure consistent portfolio returns.

“EPF investment portfolios are conservative and that is great for the fund. I believe the fund would continue to diversify its portfolio strategy.

“All these assets have less liquidity as compared to equity and bond, however it gives consistent returns of investments,” he said adding that EPF is expected to continue investing in fixed assets as it has been the fund's core portfolio.

Hasif said the dividend payment by EPF is expected to be higher should the local bourse perform better this year as expected.