EPF invests RM4.9b in small, medium-cap firms

CEO says the pension fund is constantly open to investment opportunities

by FARA AISYAH / pic by ISMAIL CHE RUS 

The Employees Provident Fund (EPF) has invested a total of RM4.86 billion in small and medium capitalised stocks in Malaysia through both its internal and external fund managers last year.

The equities portfolio remains the largest contributor to the EPF’s income, which recorded an 8% increase from RM309.48 billion in 2016 to RM334.23 billion as at end December 2017.

CEO Datuk Shahril Ridza Ridzuan (picture) said the company is constantly open to new investment opportunities that can provide incomes that are sustainable and long term as its funds continue to grow.

“Our strong investment performance was largely driven by our investments in equities. We have been investing in stocks across various sectors, which include small-and medium-cap companies.

“As at end 2017, we invested in 192 small-and medium-cap companies, and we are committed to finding more good companies to add to our existing portfolio,” Shahril Ridza said in a statement yesterday.

He also said the EPF would constantly monitor and assess the performance of the country’s smalland medium-cap companies to see if they are suitable for investment and fit the retirement fund’s risk return profile.

Among the qualities that the EPF would look for in such companies include good governance, cost structure and sound business performance.

Shahril Ridza added that the EPF has been doing co-investments with the small-and medium-cap companies to help their growth as it sees future potential in them, which should also help to spur economic growth and boost the EPF’s investment income.

In the recently tabled EPF Annual Report 2017, its total gross investment income as at Dec 31, 2017, was RM53.14 billion and total investment asset at RM791.48 billion with return on investment of 7.3%.

The EPF has reported a RM65.52 billion, or 6.38%, increase in its annual contribution as at April this year, against a total withdrawal of RM49.4 billion in 2017 — which resulted in a net inflow of RM16.12 billion.

A statement by the EPF following the release of its 2017 annual report said the pension fund’s total investment also rose 8.26% to RM791.48 billion from the RM731.11 billion recorded in 2016.

Its total members’ contribution was registered at RM768.51 billion, while the total payout expanded 29.8% to RM48.13 billion in 2017.

The EPF had declared a dividend rate of 6.9% for conventional savings, with a payout amounting to RM44.15 billion, and 6.4% for Shariah savings, with a payout amounting to RM3.98 billion.

Shahril Ridza also said the fund has achieved a “notable milestone” as it declared the first investment results and dividend rate for Simpanan Shariah.