EPF to continue to focus on cash-generating assets, not considering digital assets

Monday 20 May 2024

SHAH ALAM (March 3): The Employees Provident Fund (EPF) will continue to focus on cash-generating assets under its Strategic Asset Allocation (SAA) plan and will not consider investing in digital assets, said its chief executive officer Ahmad Zulqarnain Onn.

He said the retirement fund is going to continue to invest in relevant asset classes that are consistent with its prudent investment strategy.

“The simple answer to digital assets is a no as for the EPF; the cash generation factor is incredibly important for us when it comes to investment. Similarly, this is the same reason that we genuinely do not invest in commodities, because a commodity is a physical asset with no cash generation capabilities,” he said during a question-and-answer session after announcing the EPF’s performance and dividend for FY2023 here on Sunday.

Under the EPF’s SAA breakdown for financial year 2023, 46% was allocated for fixed income, 42% in equity, 7% in real estate and infrastructure, and 5% in money markets.

The EPF remains the largest investor in the domestic market, as its assets under management (AUM) rose to RM702.48 billion as of December 2023, from RM643.38 billion in 2022.

The retirement savings fund said deployment into domestic markets accounted for more than 80% of its investment allocation for 2023, providing capital to Malaysian companies and the economy as a whole.

As of December 2023, the EPF held about 28% of the outstanding Malaysian Government Securities (MGS) and Government Investment Issues (GII) issuances, and about 12% of the FTSE Bursa Malaysia Top 100 Index market capitalisation.

The EPF’s participation in Bursa Malaysia in terms of value traded was 23% for FBM100 stocks and 31% for the FBM KLCI stocks.

On the ringgit’s performance, Ahmad Zulqarnain said the retirement fund is in sync with Bank Nagara Malaysia’s stance on the valuation of the ringgit. “We agree that the ringgit is undervalued, and for the EPF, it means purchasing more assets in ringgit,” he added.

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