KUALA LUMPUR: Starting Jan 1, 2024, the Employees Provident Fund (EPF) has strategically separated its Simpanan Konvensional and Simpanan Shariah portfolios in relation to their Shariah-compliant investment, with each portfolio having its independent strategic asset allocation.
This aims to allow each portfolio's returns to be optimised in the long run.
The EPF said in a statement today that since the Budget 2023 announcement, it has been working towards the implementation of the strategic split, aiming to enhance alignment with the mandate and long-term strategic objectives of Simpanan Shariah.
The move is also a proactive move to ensure that assets under both Simpanan Shariah and Simpanan Konvensional are well diversified across asset classes, markets, countries, and currencies to ensure sustainable returns.
Simpanan Shariah was introduced in January 2017 as an option for members who wish to have their EPF savings managed and invested in accordance with Shariah principles.
As of Sep 30, 2023, the EPF's investment assets amounted to RM1,092.32 billion, comprising 39 per cent Shariah assets and 61 per cent conventional assets.
In addition to adhering to ethical investment practices that avoid sectors such as alcohol, gambling, adult entertainment, and military weapons, Simpanan Shariah employs a rigorous Shariah screening process and appropriate Shariah contracts in its investment.
This process, based on criteria and policies set by the EPF's Shariah Advisory Committee, ensures that all investment assets are in line with Shariah principles, eliminating Shariah non-compliant elements such as usury, uncertainty in contracts, as well as prohibited items like non-halal goods and services.