PETALING JAYA: The Employees Provident Fund (EPF) reported an investment income of RM57.57bil for the nine months ended Sept 30, 2024 (9M24), marking a 20% increase from RM47.86bil in the same period in 2023.
In the third quarter (3Q24), the EPF’s investment income reached RM19.67bil, up RM5bil from RM14.67bil in the same period in 2023.
In a statement, EPF chief executive officer Ahmad Zulqarnain Onn said the EPF’s robust performance reflected its investment strategy of maintaining a highly diversified portfolio across major asset classes.
“Malaysia’s gross domestic product (GDP) grew by a solid 5.9% year-on-year in the second quarter, while the FBM KLCI closed at 1,648 at the end of 3Q24, returning 13% year-to-date.
“Investor sentiment remains positive, bolstered by the performance of Malaysian companies, economic policies and fiscal reforms.
“Global markets were generally positive during the quarter, driven by the start of the interest rate easing cycle as the US Federal Reserve reduced interest rates by 50 basis points in September,” Ahmad Zulqarnain said.
He noted that the highly anticipated reduction in US interest rates drove market sentiment and gains across multiple sectors, including real estate investment trusts, utilities, and financials – all of which positively impacted the EPF’s investment portfolio.
“China’s real GDP growth was recorded at 4.6% year-on-year, slightly down from 4.7% in the previous quarter.
“Nonetheless, risks remain in the global outlook such as the trajectory and pace of interest rate reductions, persistent and escalating geopolitical tensions particularly in the Middle East, and potential higher import tariffs into the United States with the election of Donald Trump last week,” he added.
The provident fund reported that its equity investments remained a major income contributor in 3Q24, generating RM18.32bil.
This increase from RM9.17bil in 3Q23 highlights EPF’s proactive strategy in capitalising on market volatility and benefiting from the positive momentum in equity markets.
Fixed income, which plays a crucial role in capital preservation, has been the anchor for the EPF by providing a steady income stream and mitigating the impact of short-term market volatility.
This asset class, comprising Malaysian Government Securities and equivalents, as well as loans and bonds, contributed 33% or RM6.51bil, to EPF’s total investment income for 3Q24.
Meanwhile, real estate and infrastructure posted a gain of RM0.82bil for the quarter on a constant currency basis.
However, as most real estate and infrastructure investments, along with money market instruments, are denominated in currencies other than the ringgit, the recent strengthening of the ringgit against the US dollar in 3Q24 led to a loss of RM3.71bil in real estate and infrastructure, and RM1.45bil in money market instruments, due to foreign exchange translation.
It said these positions are temporary, reflecting current currency movements. International money markets are highly sensitive to short-term currency fluctuations, leading to translation losses during periods of currency appreciation.
The EPF’s investments in real estate and infrastructure have a longer-term horizon where currency movements have less impact on overall actual returns.
As of September 2024, the EPF’s investment assets totalled RM1.22 trillion, with 62.2% and 37.8% allocated to Malaysian and international investments.
In 3Q24, international investments contributed RM10.50bil, accounting for 53% of total investment income.
Of the total investment income, RM48.02bil was generated for Simpanan Konvensional, and RM9.55bil for Simpanan Syariah.
During the first three quarters of 2024, the EPF saw 364,364 new member registrations, bringing total membership to 16.1 million.
A total of 8.69 million are active members, representing 50.4% of Malaysia’s 17.24 million labour force.
Meanwhile, new employer registration recorded during the period was 55,717, bringing the total number of active employers registered with the EPF to 612,889.
Total contributions received increased from RM23.1bil in 3Q23 to RM25.2bil in 3Q24.
The EPF said throughout the first half of 2024, i-Saraan recorded total contributions of RM1.61bil from 330,196 members, reflecting a 103% increase from RM789.3mil and a 56% increase from 211,361 members in the corresponding period in 2023.
Ahmad Zulqarnain also welcomed the government’s announcement to enhance the i-Saraan programme as announced during the Budget 2025.
This enhancement includes an increase in the matching incentive from 15% to 20%, up to a maximum of RM500 per year and a lifetime limit of RM5,000 per individual, set to take effect on Jan 1, 2025.
