EPF eyes Latin America as new investment destination

An increase in the overseas asset portfolio will provide the fund with the necessary diversi cation, says CEO


THE Employees Provident Fund (EPF) is eyeing expansion into the Latin American market as part of its efforts to boost its global assets portfolio to 32% this year from 28% in 2017.

Its CEO Datuk Shahril Ridza Ridzuan (picture) said an increase in the overseas asset portfolio would provide the fund with the necessary diversification and returns to meet contributors’ expectations.

“Like many global pension funds, we need to have a balanced portfolio and increase its exposure as much as possible to growth around the world,” he told reporters at the fund’s 2017 dividend briefing in Kuala Lumpur yesterday.

He said overseas investments also provided high returns, contributing 41.4% of the total income, despite making up only 28% of the total investments last year.

“Our historical chart has shown that global assets give us the necessary diversification and exposure to growth, which is vital for the fund to continue to perform and provide the kind of return that our members expect,” Shahril Ridza said.

He said diversification into overseas markets also helped the fund compensate for any downturn in any of its investment market and continue to grow.

As of last year, the EPF had presence in 30 markets — primarily in the developed market, North Asia and Asean.

On Shariah savings, Shahril Ridza said they had as of last year attracted about 700,000 contributors with a total size of RM68 billion from RM100 billion allocated for the savings.

The total conventional savings and Shariah savings have about 14 million contributors and a total fund size of RM768.51 billion, he said.

He said Shariah assets made up 47.5% of the fund’s total asset exposure and contributed 42.9% of total income last year.

“Shariah investments’ underperformance was attributed to the oil and gas and mobile telecommunication sectors,” he said.

Nevertheless, he said Shariah investments contributed 36% to conventional savings dividend distributions on top of 100% contributions to Shariah savings.

Last Saturday, the EPF announced a 6.9% dividend for conventional savings with a payout amounting to RM44.15 billion and 6.4% dividend to Shariah savings, with payout amounting to RM3.98 billion.