2ND QUARTER ACHIEVEMENT: RM7.66b revenue despite global economic uncertainties
KUALA LUMPUR: THE Employees Provident Fund (EPF) recorded a 13.42 per cent jump in its investment income for the second quarter ending June to RM7.66 billion, despite uncertainties in the global economy.
The healthy earnings recorded for the April-June period compared with the same period last year were backed by strong performance from its equity investments.
"Our active but disciplined approach has enabled us to reap benefits from the stocks that delivered high yields," said EPF chief executive officer Tan Sri Azlan Zainol.
Equities remained the largest contributor in this quarter, posting an investment income of RM3.84 billion, 17.4 per cent more than RM3.27 billion, a year ago.
Loans and bonds generated RM2.06 billion income, RM272.32 million more than RM1.79 billion in the same quarter last year.
During the quarter, the EPF also allocated RM1.5 billion to external fund managers for domestic equity mandate and RM600 million for domestic fixed-income mandate.
"The outsourcing of the new mandates is in line with our diversification strategy adopted for EPF's investments and formed part of our contributions to boost the development of the local fund management industry," Azlan said.
As at June, EPF's total overseas exposure made up 15.45 per cent of its total investment cost. This is a improvement from 13.96 per cent in the first quarter of the year.
During this time, an additional US$2.92 billion (RM9.05 billion) of investments were made in global bonds, equities and real estate. One of EPF's major overseas transactions was a A$500 million (RM1.6 billion) investment in properties in Australia with Goodman Group on a 60:40 basis. EPF holds the controlling stake.
"The move to amplify our global exposure lies in our need to diversify and bolster our investment portfolio. This is in line with the fund's long-term plan to gain reasonable returns for our members.
"However, we are always vigilant, especially with the continued weakening of the eurozone which would naturally affect the growth momentum of the world economy."
As at June 30, EPF's investment assets stood at RM494.75 billion, seven per cent more than RM462.22 billion, a year earlier.
Total contributions received in the second quarter amounted to RM12.42 billion compared with RM8.96 billion of total withdrawals resulting in RM3.46 billion net inflow of funds.
"While we remain committed to enhancing our investment portfolio, we will continue to hold fast to prudent principles and a low-risk investment policy. This is to ensure that EPF generates returns that are in accordance with our investment risk appetite and that members' savings continue to be protected."
Azlan noted that EPF had been named the Best Islamic Institutional Investor in the Islamic Finance News (IFN) Islamic Investor Poll 2012.
He said, "as one of the largest institutional investors in the world, EPF has a critical need to diversify its investments to include Islamic securities in order to optimise returns and improve its risk-return profile to ensure stable and growing returns for its members."