The Employees Provident Fund (EPF) has recorded RM33.19 billion in investment income for the first half of the year, ending in June 2023 (1H 2023). This is a noticeable increase of RM9.44 billion compared to the same period last year.
Out of the RM33.19 billion total investment income, EPF has generated RM4.79 billion from mark-to-market (MTM) gains of securities that have not been realised. EPF said that the MTM gains were credited to the fluctuations in the fluctuations in foreign exchange rate.
Positive performance in 1H 2023
EPF chief executive officer Datuk Seri Amir Hamzah Azizan said the performance of the global equity markets in the 1H 2023 had been positive.
This was led by a run-up in the developed markets. Notably, the US market continues to show resilience despite the rise in interest rates.
“The EPF’s agility and adaptability in its investment strategy paved the way for the investment managers to take advantage and capitalise on the market rally, which contributed to the higher return from equities during the period,” he said in a statement.
“This is in contrast to the equity market performance seen in the first half of 2022, which saw several indices suffering significant declines, with most markets including the US posting their worst first-half performance in decades,” he added.
First quarter GDP surpassed expectations
Amir Hamzah added that the 5.6 percent gross domestic product (GDP) growth in the first quarter had surpassed expectations. Improvements in the domestic market also helped boost the increase in GDP.
During the second quarter of 2023 (Q2 2023), EPF’s total investment income more than doubled, achieving RM18.03 billion. This is an increase of RM9.05 billion from the RM8.98 billion that was recorded in the same quarter last year.
Out of the RM18.03 billion investment income generated in Q2, a total of RM16.27 billion was generated for Simpanan Konvensional. Another RM1.76 billion was recorded for Simpanan Shariah.
For those who are unaware, Simpanan Shariah derives its income solely from its portion of the Shariah portfolio. On the other hand, income for Simpanan Konvensional is generated by a share of both the Shariah and conventional portfolios.
Meanwhile, it was revealed that equity investments continue to be the main contributor of income for Q2 2023 at RM9.60 billion. At the same time, the asset class generated RM4.07 billion in income during the same quarter in 2022.
EPF said that a large portion of the improvement can be credited to the proactive and timely realisation of profit, supported by the MTM gains of securities. After taking into account write-downs, these numbers accounted for 53 percent of the total investment income for the quarter.
