KUALA LUMPUR, Dec 15 (Bernama) -- The Employees Provident Fund (EPF) today announced that driven by commendable returns from equity investments, it had registered a healthy RM6.80 billion in investment income for the third quarter ended Sept 30, 2011 (Q3).
This is a year-on-year growth of 18.32 per cent compared to the RM5.75 billion recorded in Q3 2010.
Combined with a steady stream of net contribution by members, EPF's investment assets continued to register healthy growth to RM452.05 billion, compared to RM440.52 billion as at end-2010.
"The third quarter results were slightly ahead of our expectations," said its chief executive officer Tan Sri Azlan Zainol, in announcing the Q3 2011 unaudited results issued here.
He said the third quarter saw both domestic and global markets under heavy selling pressure, following the downgrade of the US credit rating from AAA to AA+ by Standard & Poor's and the contagion of the Eurozone debt crisis.
"However, our portfolios remained healthy and the resilient asset quality, helped reduce the impact from short term volatility," he added.
He noted that the EPF's creditable investment performance was particularly attributed to the efforts of its equity fund managers, who were able to execute a profit taking strategy by locking in profits, especially before the market downturn, coupled with the good dividends received from listed companies.
"In addition, the positive result was also a consequence of EPF's compliance to an effective framework of prudence, to grow and protect members' savings," he said.
During the quarter under review, equities remained the top performer, drawing an investment income of RM3.26 billion, representing a double-digit rise of 36.47 per cent or RM871.75 million from the RM2.39 billion recorded in Q3 2010.
Loans and bonds were the second largest contributor to EPF's investment income, generating RM1.93 billion for Q3 2011.
"This marked an increase of 11.29 per cent from the RM1.73 billion achieved in the same corresponding period of 2010," Azlan said.
Income from Malaysian Government Securities showed a steady growth of 5.67 per cent to RM1.47 billion compared to RM1.40 billion in the same quarter in 2010.
In Q3 2011, returns from property grew by 23.36 per cent to RM28.20 million from RM22.86 million in Q3 2010.
Money market instruments recorded RM109.97 million in income during Q3 2011, reflecting a decrease of RM98.71 million when compared to the same quarter last year.
This was mainly due to a shift in allocation into higher yielding and long term assets to optimise returns, namely into global property, global equity and global sukuk investments.
"As a provident fund, our investment horizon is long-term. In any economic crisis or slowdown, there are opportunities and prospects to be explored due to its cyclical nature," Azlan said.
"The changes in the global economic landscape have provided us an opportunity to fine-tune our investments in accordance with our Strategic Asset Allocation by moving into more attractive investment options," he added.
Nevertheless, he said, in view of the prevailing global uncertainties looming the investment landscape, the EPF, as always, will continue to be cautious and vigilant in its investments through a judicious low-risk investment approach.
-- BERNAMA
