Malaysia’s EPF says its portfolio ended 2020 up 7.9% to around $ 250 billion

Malaysia’s Employee Provident Fund posted record gross investment gains in 2020, bringing the value of its portfolio to one trillion ringgit ($ 246.7 billion) by the end of the year.

The EPF made these advances despite granting members early access to their retirement savings to help them survive the economic devastation of the coronavirus crisis.

An announcement made on Saturday by the national defined contribution system indicated that it had credited a dividend of 5.2% on the accounts of its 13.8 million members of the “conventional” plan, against 5.45% the year previous. It was the lowest level since the 4.5% payment for 2008, the year of the global financial crisis.

Meanwhile, the 1.12 million EPF members who moved into the EPF’s Sharia-compliant portfolio after this option was introduced four years ago have been credited with a dividend payment. of 4.90%.

EPF President Ahmad Badri Mohd Zahir in a press release said his team had walked “a tightrope” in 2020 “in ensuring our members survive tough times while balancing their needs. future “.

The press release said the EPF had been “one of the first pension funds in the world to provide assistance to its members during the pandemic”, launching a program that allowed members to withdraw savings from the smallest of their two EPF accounts designed to cover the costs of a wide range of needs, including housing, education and medical services.

For this “i-iLestari” facility, 5.16 million EPF members withdrew a total of 18.1 billion ringgit during the year, according to the press release.

The EPF launched a separate program last November to give members early access to their larger retirement savings-focused accounts. While the press release did not offer any details regarding the amount of money withdrawn, an earlier announcement on January 6 indicated that the EPF had approved R19.6 billion of withdrawals under the new “i-Sinar” program. “.

In a context of high market volatility during the year – the main stock market indices having fallen 40% in the first quarter, followed by a rapid rebound thanks to unprecedented stimulus policies by central banks and governments – the A press release said that the EPF recorded “its highest gross investment income on record” of approximately Ringgit 61 billion, up from Ringgit 50.3 billion the previous year.

Saturday’s new release said that during the first quarter, EPF’s investment team “seized the opportunity to rebalance its portfolio by acquiring fundamentally strong stocks at attractive prices,” and later on fourth quarter, it blocked gains by selling.

For the year, EPF’s investment portfolio grew 7.9% to around one trillion ringgit.

Overseas exposures at the end of 2020 represented 33% of the portfolio, against 30.3% the previous year and 26.7% at the end of 2018.

By asset segment, the EPF portfolio closed 2020 with allocations of 46% in bonds, 42% in equities, 7% in money market instruments and 5% combined in real estate and infrastructure.

At the end of 2019, the fund had allocations of 49% in bonds, 39% in equities, 7% in money market instruments and 5% in real estate and infrastructure.