News  |  Business

EPF outsources RM108 billion to external portfolio managers

EPF outsources RM108 billion to external portfolio managers
EPF has outsourced RM108 billion to external portfolio managers, as at Dec 31, 2016, an increase of 10.36 per cent, compared with RM97.86 billion outsourced in 2015.
KUALA LUMPUR: The Employees Provident Fund (EPF) has outsourced RM108 billion to external portfolio managers, as at Dec 31, 2016, an increase of 10.36 per cent, compared with RM97.86 billion outsourced in 2015.

This allocation, invested in both equity and fixed income instruments, represented approximately 14.77 per cent of its total investment assets, said EPF, Malaysia''s premier retirements savings fund in a statement today.

"As we gear up towards becoming a trillion-ringgit fund, we will continue to outsource a portion of our funds as part of our diversification initiative, and to suitably leverage on the knowledge and skill sets of external fund managers that complement our own internal fund management capabilities," said Chairman Tan Sri Samsudin Osman.

He added that the fund would continue to increase its exposure in the markets EPF was investing in, especially in alternative investments and infrastructure.
"However, taking into account the prevailing market volatility and subdued growth, our expansion will be gradual and done in a prudent manner," said Samsudin.

EPF's investment objective remains, to declare no less than 2.5 per cent in nominal dividend on a yearly basis, and at least two per cent real dividend on a three-year rolling basis.

It would also continue to pursue asset diversification in order to mitigate portfolio risks and it planned to increase exposure into alternative investments to 10 per cent of total asset under management.

With about 45 per cent of investment assets being shariah-compliant prior to the launching of Simpanan Shariah in 2016, the EPF now expected to grow these assets by at least RM25 billion a year, on average, to meet the demand of members.

Samsudin said the competition for high-quality Islamic assets was not only confined to investors in the Muslim world, given their attractiveness as an alternative ethical financing tool, but also appealed to Western pension funds alike.

"The EPF needs more quality Islamic assets to invest in, and we welcome external managers to join us in our commitment to grow our Shariah mandate," he said.

Meanwhile, the fund''s exposure to shariah-compliant investments, covering multi-asset classes, currently exceeded 40 per cent of total assets.

As at Dec 31, 2016, its total investment assets stood at RM731.11 billion, up 6.81 per cent, from RM684.53 billion in 2015.

"The EPF sets high standards on performance and we appreciate the hard work of our external fund managers, who have shown full commitment in managing our funds," said Samsudin. -  BERNAMA