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KUALA LUMPUR: The Employee Provident Fund (EPF) posted a gross investment income of RM15.12bil in the second quarter ended June 30 during extremely volatile and challenging conditions
In a statement yesterday, EPF said that the shares, which contributed 54% to total gross income, posted RM8.11bil in investment income.
This was followed by fixed income instruments, which contributed 6.17 billion ringgit. Real estate and infrastructure, as well as money market instruments, contributed RM470 thousand and RM370 thousand.
However, net investment income declined to RM13.46 billion after the amortization of the costs of listed shares, which the EPF described as a prudent practice to ensure that its long-term investment portfolio remained healthy. .
EPF CEO Tunku Alizakri Alias said that the extremely volatile and challenging conditions observed since the beginning of the year showed no signs of normalization.
He cited ongoing issues, such as trade tensions between the United States and China and low oil prices that had not been resolved, and Covid-19 continued to wreak havoc around the world.
“The major economies were locked in and closed borders meant that supply chains were disrupted.
“The EPF’s strategic asset allocation framework, which guides us in how we structure our investments and portfolio, served us well during the tumultuous first half of the year.
“For example, our exposure to fixed income instruments allowed us to overcome the initial drop at the beginning of the quarter. Then we saw a bullish move in stocks towards the end of the quarter as both the FBM KLCI and global markets began to improve as economies gradually reopened.
“Going forward, we remain cautious, as a second Covid-19 wave remains a possibility that will have a large negative multiplier impact on already weak economic conditions,” he said.
At the end of June, EPF’s investment assets amounted to RM929.64 billion, of which 30% was invested abroad.
As of the second quarter, 39% of total recorded investment gross income was contributed by EPF’s overseas investments.
Overseas revenue was driven by the recovery in global equity markets in the second quarter, allowing EPF to overcome the decline in the first quarter.
Fixed income also contributed to higher earnings due to the underperforming environment, which provided more opportunities for the fund to realize its earnings.
“In light of the unprecedented situation, we believe that we have managed to deliver a satisfactory performance, balancing the urgent liquidity needs of our members with the long-term responsibility of ensuring financial adequacy at retirement and sustainable returns on investment. Tunku Alizakri said. .
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