EPF’S 1Q income rises 33.1% to RM19.2bil

PETALING JAYA: The Employees Provident Fund (EPF) recorded total distributable income of RM19.20bil for the first quarter ended March 31, 2024 (1Q24), an increase of 33.1% from the RM14.42bil recorded in the corresponding quarter in 2023.

The distributable income does not include mark-to-market (MTM) gains of securities that have not been realised.

EPF chief executive officer, Ahmad Zulqarnain Onn said: “The performance of global markets in the first quarter of 2024 was marked by resilient global growth, notably in advanced economies. The FBM KLCI index has increased by 10% year-to-date, reflecting increased confidence in the growth and impact of various new economic and industry policies.

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“Internationally, the US economy continued to grow, lowering expectations for Fed rate cuts during the year, and major stock indices showcased strong rallies during the first quarter, led by a run-up in financial, healthcare, and technology stocks.”

Ahmad Zulqarnain added that whilst first quarter results have been strong, financial markets remain subject to a number of risks that have been prevalent.

This, he said, includes ‘high for longer’ interest rates, geopolitical and conflict risks and changes in policies resulting from a large number of elections being held in a number of large economies this year.

During the quarter under review, income from equities increased to RM13.15bil, compared to RM8.69bil recorded in Q123. The asset class remained the top income contributor at 68% of total distributable income.

The increase in income is attributed to the fund managers’ proactive strategy in realising capital gains during the market rally, taking advantage of the favourable conditions before the uncertain environment anticipated in the coming quarters.

Fixed Income instruments continue to be the anchor for the EPF, providing a steady stream of income and mitigating the impact from short-term market volatility.

This asset class, predominantly Malaysian Government Securities, contributed 27% or RM5.14bil to the total distributable income for Q124.

The EPF’s overall investment assets as at March 2024 grew to RM1.19 trillion, of which overseas investments account for 38% of the total assets.

The EPF’s overseas investments, which were mainly in equities, continued to outperform and add value to the EPF’s overall return as they generated RM9.88bil in income, representing 51% of the total distributable income recorded.