The Employees Provident Fund (EPF) has been increasing its investment to grow as yields from the fixed income division slow down.
Their chief executive officer, Datuk Shahril Ridza Ridzuan said “In anticipation of the ongoing weak economic conditions, we will continue to manage our investment portfolio prudently using a risk-based approach,”.
EPF will be shift to buying and selling shares, where equities continue to be the main contributor of income with 58.8% amounting RM21.6 bil, up 13.5% compared with RM22.9bil in 2014.
Last year, EPF total gross investment income is RM44.23billion.The fixed income asset class, comprising Malaysian Government Securities (MGS) & equivalent and Loans & Bonds, in total contributed 35.4% of the RM44.23bil which is lower compared to 36% in 2014.
As of end 2015, the pension fund manages RM684.5bil worth of investment assets, where overseas investment makes up 25% of EPF’s total investment assets.
This works out to about RM171bil, which is invested mainly in equities, bonds and real estates.As such, the higher income from investment has helped EPF boost its annual dividend payout last year to to 6.4%, or a total payout amounting to RM38.24bil.
The payout amount required for every one percent dividend rate for the year was RM5.98bil, which was a 10.13% higher compared with RM5.43bil in 2014.
Its highest dividend was from 1983-87 when it declared 8.5%.
Post Global Financial Crisis, the fund has credited dividends amounting to RM198.9bil, where last year’s payout was the most since the fund’s inception.
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The inflation asset class, comprising Real Estate and Infrastructure, contributed RM1.7bil investment income last year with annual growth of 22.2% compared with 2014.
Most of EPF’s investments in the Real Estates and Infrastructure asset class are made through associate and subsidiary companies, of which dividend income from these companies made up the majority of the asset class’ gross investment income.
Within the asset class, the foreign investments, which were initiated in 2010, have shown encouraging performance over the years and began to generate significant income in 2015, the annual report says.
Source :- The Star