[ad_1]
KUALA LUMPUR (Dec 23): The Employee Provident Fund (EPF) posted a gross investment income of RM17.33 billion in the third quarter (Q3) of this year, an increase of 14% over RM15.12 billion reported in 2Q.
In a statement, EPF said equities contributed RM7.29 billion or 42% of total gross investment income, while fixed income instruments contributed RM8.18 billion or 47%.
Real estate and infrastructure, and money market instruments contributed RM1.63 billion and RM230 million respectively. Its net investment income, after accounting for the impairment and amortization costs of listed shares, was RM16.87 billion.
“This year has seen great volatility in the financial markets that saw very rapid movements from one extreme to the other.
“Our financial positions during the first three quarters have been affected by volatility in market sentiment exacerbated by the uncertainties of the Covid-19 pandemic and fragile consumer sentiment,” said EPF CEO Tunku Alizakri Alias .
The fund said the global equity indices it closely tracks have rebounded from their lowest level in March, though many have yet to rebound to the pre-pandemic levels seen in late 2019.
He said the widespread drop in yields provided opportunities for EPF to increase its business activities and capitalize on profits, but remains cautious in the face of lower reinvestment returns and to ensure that the long-term health of its portfolio is not compromised.
At the end of September, EPF said that its investment assets amounted to RM 941.77 billion, of which 68% was allocated to the domestic market, while 32% was allocated to foreign markets, which contributed to 45% to gross investment income for Q3.
In terms of asset class, 49% of its portfolio was represented by fixed income instruments, while equities represented 39%, followed by money market instruments (7%) and real estate and infrastructure (5% ).
“While we remain guided by our SAA (Strategic Asset Allocation), a lot really depends on quick and effective responses to the Covid-19 pandemic that must address the massive impact on the economy and ensure the continuity of businesses, jobs and lives.” Alizakri said.
He added that the struggle of economies around the world to recover from lockdowns and rising infections will be a “serious impediment” to any global economic recovery to pre-pandemic levels.
Interest rates are expected to remain low for longer, he said, as central banks continue to ease monetary policy to support their economies.
“For Malaysia, as a trade-dependent country, the continuing uncertainties surrounding the global economic recovery will have an impact on external demand that can then affect the employment outlook and slow down domestic economic activities,” Alizakri said.
He said EPF remains steadfast in its commitment to helping its members achieve a better future and also safeguarding their long-term retirement savings by preserving capital and getting through this volatile period.
[ad_2]
