KUALA LUMPUR (Aug 13): The Employees Provident Fund (EPF) reported on Tuesday that its total investment assets grew to RM1.21 trillion as of June 2024, an increase of RM20 billion against RM1.19 trillion three months ago as at end-March.

The provident fund recorded a distributable income of RM17.5 billion in the second quarter ended June (2Q2024), up 25% year-on-year (y-o-y) from RM13.98 billion in the same quarter last year.

This was however, slightly lower than the RM19.2 billion recorded in 1Q2024, when it saw 33.1% y-o-y growth from RM14.42 billion the year before.

Of the RM17.5 billion distributable income recorded in the April-June period, RM8.64 billion or 49% was contributed from overseas investments, the EPF said in a statement. 

Overseas assets make up 38% of its RM1.21 trillion investment asset base, the fund said.

In the quarter, total contributions received amounted to RM27.42 billion, slightly lower than RM29.13 billion in 1Q2024.

Cumulatively, distributable income rose 29% y-o-y, from RM28.4 billion in 1H2023 to RM36.7 billion in 1H2024, of which RM31.34 billion was generated for Simpanan Konvensional and RM5.36 billion for Simpanan Shariah. 

“The distributable income does not include mark-to-market (MTM) gains of securities that have not been realised,” it said. 

In 2Q2024, equities continued to be the main income driver for the fund, generating RM10.75 billion (61.4%), compared to RM7.84 billion in 2Q2023, the EPF said.

This was followed by write-downs of RM69 million, attributed to active fund management and improved equity market conditions.

The EPF also noted that fixed-income instruments remained a key component of its portfolio, providing a stable income and buffering against short-term market volatility. 

These assets, primarily Malaysian Government Securities (MGS), along with loans and bonds, contributed RM5.72 billion (32.7%) to the total distributable income for 2Q2024.

In addition, the fund said that real estate and infrastructure investments yielded RM50 million, while money market instruments contributed RM53 million, consistent with prevailing interest and profit rates.

“Despite relatively calm market conditions, risks persist as illustrated in the recent sell-down in global markets and sharp increases in volatility caused by market participants unwinding some concentrated and crowded positions," said EPF chief executive officer Ahmad Zulqarnain Onn. 

As a long-term investor, the EPF will continue with its strategy of constructing a highly diversified portfolio, driven by its strategic asset allocation, Ahmad said in the statement. It was previously reported that the EPF is set to allocate more than 80% of its new investment annual allocation to the domestic market.

The EPF also saw an increase in membership and contributions during the quarter, bolstered by a resilient labour market, which saw the unemployment rate drop to 3.3% in 2Q2024.

The fund registered 235,032 new members in 1H2024, bringing its total membership to 16 million, with 8.6 million active members contributing at least once in the past 12 months.

In 2Q2024, new employer registrations also rose, with 37,284 new employers joining, bringing the total number of active employers to 610,357.

The EPF’s total contributions surged to RM57.35 billion in 1H2024, up from RM50.48 billion in 1H2023.

Voluntary contributions saw a significant increase, with 742,556 contributors in 1H2024, marking a 39% rise from 535,307 in 1H2023. Total voluntary contributions reached RM7.51 billion, a 91% jump from RM3.93 billion in the corresponding period last year.

Conversely, the number of formal sector members opting to contribute above the statutory rate declined to 27,121 in 1H2024, down from 38,893 in 1H2023.