KUALA LUMPUR: The Employees Provident Fund (EPF) reported a 33.1 per cent increase in total distributable income for the first quarter ended March 31, 2024 (Q1 2024), rising to RM19.2 billion from RM14.42 billion in the same quarter of 2023.
A total of RM16.56 billion out of the RM19.2 billion total distributable income was generated for Simpanan Konvensional, and RM2.64 billion for Simpanan Shariah.
EPF chief executive officer Ahmad Zulqarnain Onn attributed the robust performance in Q1 2024 to resilient global growth, particularly in advanced economies.
"While first quarter results have been strong, financial markets remain subject to a number of risks that have been prevalent, namely '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," Ahmad Zulqarnain said in a statement.
According to EPF, the distributable income excludes mark-to-market (MTM) gains from unrealised securities.
Income from equities increased to RM13.15 billion, compared to RM8.69 billion recorded in Q1 2023. The asset class remained the top income contributor at 68 per cent of total distributable income.
The EPF attributed the growth in income to the fund managers' proactive strategy of realising capital gains during the market rally, capitalising on favourable conditions before the anticipated uncertainties in the coming quarters.
Fixed-income instruments remain the cornerstone of the pension fund, providing a steady income stream and mitigating the impact of short-term market volatility.
The EPF reported that this asset class, primarily Malaysian Government Securities (MGS), contributed 27 per cent or RM5.14 billion to the total distributable income for Q1 2024.
Real estate and infrastructure generated RM0.22 billion in income for Q1 2024, while money market instruments yielded RM0.69 billion, aligning with the expected returns for these asset classes.
As of March 2024, EPF's overall investment assets grew to RM1.19 trillion, with overseas investments accounting for 38 per cent of the total. These overseas investments, mainly in equities, outperformed and significantly contributed to the overall return, generating RM9.88 billion in income, or 51 per cent of the total distributable income.
Meanwhile, domestic investments, which account for 62 per cent of total assets and are mainly invested in fixed-income instruments, continued to provide long-term income stability through interests and profits.
EPF said it remains dedicated to supporting and contributing to the growth of Malaysia's economy by continuing to allocate more than 80 per cent of its new investment annual allocation to the domestic market.