SHAH ALAM (March 3): The Employees Provident Fund’s (EPF) foreign investments was the main driver behind the pension fund’s higher dividend rates for 2023.
The EPF posted a gross investment income (net of unrealised forex and hedging impact) of RM67.39 billion in 2023 — versus RM51.14 billion in 2022 — the majority of which was contributed by overseas investments, despite having a smaller asset allocation than its domestic counterpart.
“53% (about RM35.72 billion) of overall investment income came from overseas assets and 47% (about RM31.67 billion) of total income came from domestic assets,” EPF chief executive officer Ahmad Zulqarnain Onn said during the pension fund’s financial results briefing on Sunday.
In contrast, of the EPF’s RM1.14 trillion in assets under management as at end-December 2023, 61.8% (RM702 billion) were domestic investment assets, while its foreign portfolio amounted to 38.2% (RM433 billion).
The bulk or 68% of the pension fund’s domestic investment assets were fixed-income assets, while the main asset class of overseas investment assets, comprising 74%, were equities.
The EPF posted a dividend rate of 5.5% for conventional savings for 2023, higher versus its year 2022’s 5.35%. The dividend rate for shariah savings was also higher at 5.4%, versus 4.75% in 2022.
In May last year, Prime Minister Datuk Seri Anwar Ibrahim called for the EPF to shift more of its investments domestically, pegging a domestic investment share target of 70%.
Later in January this year, Communications Minister Fahmi Fadzil said the government is looking to streamline government-linked investment companies' (GLICs) functions.
While Fahmi did not elaborate, he did note that “many of these GLICs have investments abroad”.
In 2023, the EPF deployed the bulk of its investments domestically.
Ahmad Zulqarnain said the fund had deployed a total RM126.1 billion for investments in 2023, with a substantial 88% or RM110.5 billion of it being invested domestically.
Only 12% or RM15.6 billion of the fund’s deployed investments last year went toward overseas assets.
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