KUALA LUMPUR (Dec 5): The Employees Provident Fund's (EPF) total gross investment income for the nine months ended Sept 30, 2022 (9M2022) fell 18% year-on-year or RM8.71 billion to RM39.31 billion.
In a statement on Monday (Dec 5), the retirement fund said total gross investment income for the third quarter ended Sept 30, 2022 (3Q2022) amounted to RM12.32 billion, down RM1.65 billion or 12%, compared with RM13.97 billion for the corresponding period in 2021.
However, it said this also represents an 11% improvement over 2Q2022.
EPF chief executive officer Datuk Seri Amir Hamzah Azizan said due to the stabilised market conditions for both equity and fixed income investments, the EPF’s 3Q2022 performance bettered the previous quarter’s gross investment income of RM11.14 billion.
“There are ongoing concerns that high interest rates will lead to a global recession, exacerbated by continuing geopolitical risks and interest rate hikes by the US Federal Reserve (Fed).
“However, notwithstanding these challenges, the EPF’s disciplined investment approach, guided by its robust strategic asset allocation and active portfolio management, helped to cushion the impact, and allowed the EPF to deliver a steady performance driven by the strong rebound in the domestic market,” he said.
The EPF said that during the quarter under review, equities contributed RM5.49 billion, accounting for 45% of total gross investment income.
It said despite the heightened market volatility, the EPF managed to register a healthy quarter-on-quarter growth of 13% in gross investment income from its equities portfolio.
Private equity, which is part of this asset class, managed to deliver favourable realised returns of RM1.09 billion or 20% of total equities income recorded during the quarter.
This portfolio is gradually becoming more important for the EPF’s diversification efforts, as the volatility in listed equity markets remains high, it said.
Amir Hamzah said the economic recovery serves as fertile ground for investments and opportunities that will spur economic activity, jobs, and faster movement of people and goods.
He added that this would be an opportune time for institutional investors like the EPF to reconfigure its business strategy to position for short-term endurance along with long-term resilience and growth.
“From an investment standpoint, the EPF remains resilient and focused on what we can control, namely asset allocation, costs, and an overarching strategy that emphasises long-term sustainability of our investments and returns, in line with our strategic asset allocation.
“Though the uncertainty revolving around international markets continues to be a strong concern, we are taking a ‘cautiously optimistic’ stance as we are not ignoring indicators that may suggest improvement in the macroeconomic outlook, such as the possible peak in global inflation, and the Fed’s hints that interest rate increases will begin to slow in the coming months,” he said.
Meanwhile, the EPF said it continued to record strong growth of new member registrations at 510,354 in the period from January to September 2022, adding to the total number of EPF members as at Sept 30 of 15.61 million.
It said out of that amount, a total of 8.26 million were active members, representing 50% of Malaysia’s 16.44 million labour force as at September 2022.