KUALA LUMPUR (Aug 15): The Employees Provident Fund (EPF) recorded total investment income of RM33.19 billion for the first half of the year ended June 30, 2023 (1H2023), up RM9.44 billion or 39.7% from the RM23.75 billion recorded for the corresponding period in 2022.

In a statement on Tuesday (Aug 15), the retirement fund said the amount was arrived at after netting off listed equity write-downs recorded for the period under review.

It said out of the RM33.19 billion total investment income, RM4.79 billion was generated from mark-to-market (MTM) gains in securities that had not been realised.

The MTM gains were mainly due to fluctuations in foreign exchange rates.

The EPF’s total investment income for the second quarter (2Q2023) was RM18.03 billion, up RM9.05 billion from RM8.98 billion recorded for the same quarter last year.

Equity investments continued to be the main contributor of income in 2Q2023 at RM9.60 billion.

In comparison, the asset class generated RM4.07 billion in income during the corresponding quarter in 2022.

The EPF said a significant portion of the improvement was due to proactive and timely realisation of profits, supported by the MTM gains in securities.

After taking into account the write-downs, these numbers accounted for 53% of total investment income for the quarter.

Due to active portfolio management by the EPF’s fund managers, write-downs for 2Q2023 were minimal at RM350 million, compared with the RM2.15 billion recorded for the same quarter a year earlier. Cost write-downs are an internal policy adopted by the EPF for its listed equity investments as a prudent measure to ensure that its portfolios remain healthy.

EPF chief executive officer Datuk Seri Amir Hamzah Azizan said the performance of global equity markets in 1H2023 was positive, led by a run-up in developed markets, notably in the US, which continued to show resilience despite the rise in interest rates.

He said the EPF’s agility and adaptability in its investment strategy paved the way for the investment managers to take advantage and capitalise on the market rally, which contributed to the higher return on equity for the period. This was in contrast to the equity market performance seen in 1H2022, which saw several indices suffering significant declines, with most markets including the US posting their worst first-half performance in decades.

“For Malaysia, the 5.6% gross domestic product growth in 1Q2023 surpassed expectations, driven mainly by firm domestic demand and an improvement in the labour market.

“Resilient growth tempered tighter financial conditions, providing a floor for the domestic capital market,” he said.

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