Fixed income the anchor of our investment, says EPF

EPF says the higher income compared to RM18.2 billion in 2022 is in line with its growing asset size and mainly contributed by interest and profit from bonds and sukuk.

PETALING JAYA: Fixed income instruments, predominantly Malaysian government securities, continued to be the anchor for the Employees Provident Fund (EPF) portfolio in maintaining steady returns.

“The asset class contributed RM19.7 billion (30%) of EPF’s total investment income, yielding a return-on-investment (ROI) of 4.41%.

“The higher income compared to 2022 (RM18.2 billion) is in line with the growing asset size and is mainly contributed by interest and profit income from bonds and sukuk, respectively,” EPF said in a statement.

It said equities contributed RM39.1 billion, accounting for 58% of its total investment income with an ROI of 8.68%.

“The increase in income, more than the RM27.1 billion in 2022, was mainly attributed to higher capital gains following better market conditions. Listed equity writedowns for 2023 were minimal at RM400 million, compared to the RM3.43 billion recorded in 2022. Private equity investments generated an ROI of 9.69%,” it said.

The fund said its real estate and infrastructure registered an income of RM6.03 billion, 8% or RM430 million up on the 2022 income of RM5.6 billion, recording an ROI of 5.04%.

“Income from money market instruments was RM2.17 billion, more than double the income generated in 2022, owing to higher money market balances and foreign currency translation, delivering an ROI of 4.93%,” it said.

It said that as of the end of 2023, it held RM1.14 billion in investment assets, of which 62% was invested domestically, generating RM31.7 billion over the past 12 months. Meanwhile, global assets generated RM35.3 billion.

EPF today announced a dividend rate of 5.5% for conventional savings and 5.4% for shariah accounts, bringing the total payout amount for 2023 to RM57.8 billion.

Its chairman, Ahmad Badri Zahir, said the rates represent an increase on the dividends of 5.35% for conventional savings and 4.75% for shariah accounts paid out in 2022.