EPF Reports Increased Distributable Income Of RM19.20B For Q1 2024

The Employees Provident Fund (EPF) has recently recorded a total distributable income of RM19.20 billion. This is just for the first quarter ended 31 March 2024 (Q1 2024). 

It represents a rather impressive 33.1% increase from the RM14.42 billion 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.

“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.

“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,” said EPF Chief Executive Officer, Ahmad Zulqarnain Onn.

Financial markets still at risk

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

These include ‘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.

Top income contributor sectors

Among the top contributing sectors to the strong performance are:

Equities

During the quarter that was under review, equities saw a decent increase to RM13.15 billion from the RM8.69 billion that was recorded last year. This asset class remains as the top income contributor at 68% of total distributable income. 

Fixed income instruments

Fixed Income instruments also continue to play a vital role for the E. It provides a steady stream of income that helps to mitigate short-term market volatility. This asset class, predominantly Malaysian Government Securities (MGS), contributed 27% or RM5.14 billion to the total distributable income for Q1 2024. 

Real estate, infrastructure

Real estate and infrastructure, as well as money market instruments, were asset classes that were more in line with expectations. They registered an income of RM0.22 billion and RM0.69 billion respectively.

Overseas investments continue to outperform

Overall, EPF investment assets grew to RM1.19 trillion as of March 2024. Amidst this amount, up to 38% of the total assets consisted of overseas investments. 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 RM9.88 billion in income, representing 51% of the total distributable income recorded. 

Meanwhile, EPF’s domestic investments account for 62% of total assets and mainly invested in Fixed Income instruments. These investments continue to provide long-term income stability through interest and profits. EPF continues to support the Malaysian economy by allocating more than 80% of new investment annual allocation to the domestic market.

A total of RM16.56 billion out of the RM19.20 billion total distributable income was generated for Simpanan Konvensional, and RM2.64 billion for Simpanan Shariah. 

Summary

Portfolio	Asset % of total investment asset	Distributable Income (RM billion)	As % of income
Equities	43%	13.15	68%
Fixed Income Instruments*	46%	5.14	27%
Money Market Instruments	5%	0.69	4%
Real Estate and Infrastructure	6%	0.22	1%
Total	100%	19.20	100%

* Contributions from Malaysian Government Securities & Equivalent, Loans and Bonds

Source: www.kwsp.gov.my