Kuala Lumpur, May 07, 2018 (GLOBE NEWSWIRE) -- CEO of the Employees Provident Fund (EPF), Malaysia’s National Retirement Fund, Shahril Ridza Ridzuan, stated that the Fund focuses on key fundamentals when making investment decisions, looking for long term sustainable returns, especially in infrastructure development, innovation and social development projects. This principle is applied to all EPF investment decisions, be it in Malaysia or in foreign markets.
EPF’s total fund size is roughly USD195 billion, of which 72 percent are in domestic investments. “Malaysia’s stable economy has contributed close to 60 percent of our investment income in 2017, which has enabled us to announce the highest dividend pay-out in EPF’s history of USD11.85 billion,” said Shahril. “Further, our domestic investments in key infrastructure projects such as highways, ports, power plants and airports provide stable long term returns while supporting national development and a massive social dividend over the years”.
Ever since independence, Malaysia has been able to sustain a high level of economic progress. This year, Shahril, states that the country will grow at a rate of 5.50 percent to 6.00 percent, which makes Malaysia one of the better performing middle income nations. There is a rising ratio of working-age Malaysians entering the workforce, and the unemployment rate remains at a low 3.30 percent.
Labour productivity in Malaysia rose 3.60 percent in 2017, part of a long term productivity growth trend. All these numbers point to the fact that Malaysia is on a solid trajectory of sustainable economic growth guided by stable policymaking, a key factor to investor confidence and attracting fund inflows into the domestic economy.
Shahril went on to say that these numbers bode well for Malaysians as more and more working Malaysians will have access to savings upon their retirement. The growing cohort of educated, working Malaysians effectively means more members will be making the minimum 24 percent contribution from their monthly wages into their EPF accounts, as mandated by law. The challenge for EPF, he says, is that they will need to work even harder to ensure the best possible returns to their 14 million members while delivering services through their digital platforms.
The EPF is an active global investor and now trades in over 40 countries and in 26 currencies. Global investments make up 28 percent of EPF total assets and contributes approximately 40 percent of returns, further supplementing EPF’s strong domestic performance. EPF strategy is to focus on prudent and sustainable investment in cash flow-based assets supplemented with a significant allocation to growth assets.
“The results now speak for itself. Amidst a backdrop of volatile global market conditions in 2017, we ended the year with USD13.08 billion in gross investment income – the highest in EPF’s history, and a gross ROI of 7.30 percent. We declared a dividend of 6.90 percent for our millions of contributors, the highest since 1997. We also declared a 6.40 percent maiden dividend for Simpanan Shariah, providing our members with the option of choosing a Shariah compliant savings scheme,” Shahril declared.
“Through a combination of prudent investment and management, along with the steady economic growth of Malaysia, we have been able to grow the EPF’s investment assets at a compound annual growth rate of 11.4 percent since 1985, to USD194.8 billion in accumulated assets under management, making us the fifth largest national retirement fund in Asia and the seventh largest in the world.”
Shahril conluded by saying, “Going forward, the EPF plans to build on a pipeline of private market assets in infrastructure, property, and private equity investments in both developed and developing markets, thereby filling in the gaps in our current global footprint. These are assets that we feel can provide better inflation-adjusted returns, which is a core investment objective of the EPF.
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This Release is issued by Be Strategic Sdn Bhd on behalf of EPF
About the Employees Provident Fund
The Employees Provident Fund (EPF) is Malaysia’s premier retirement savings fund to help its members achieve adequate savings for a comfortable retirement. This is in line with EPF’s vision to help members achieve a better future and the mission to safeguard members’ savings and deliver excellent services. The EPF has evolved significantly from transaction-centric to a professional fund management organization with a strong focus on retirement security. The EPF is guided by a robust and professional governance framework when making investment decisions. It continues to play a catalytic role in the nation’s economic growth and seeks to cultivate a savings and investment culture among its members to improve the country’s financial literacy level.
Shahril Ridza Ridzuan is the Chief Executive Officer.
For more information about the EPF, visit www.kwsp.gov.my.
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