EPF SHIFTING FOCUS TO LATIN AMERICA THIS YEAR, SAYS CEO
Fund aims to expand global portfolio to 32pc this year from 28pc last year
THE Employees Provident Fund (EPF) is shifting its focus to Latin America this year in a bid to increase its global investments to 32 per cent from 28 per cent last year.
Chief executive officer Datuk Shahril Ridza Ridzuan said Latin America was deemed a growth market.
“We will expand our portfolio to capture as much global growth as possible. We are currently at 28 per cent when we should be running at 32 per cent. This is four percentage points off our median target this year.
“This was due to tightening of the ringgit movement, which affected most investors, but we expect it to improve as the currency has strengthened considerably, allowing us to do more global investments,” he said at a briefing, here, yesterday.
“Our global return on investment was slightly lower last year at 10.89 per cent compared with 11.31 per cent the year before.
“Fifty per cent of investment assets remained in fixed income instruments and all asset classes recorded year-on-year growth except for the money market.”
EPF’s global investments stood at RM221.56 billion last year. Fixed income, equity, real estate and infrastructure and money market recorded growth of 10.3 per cent, eight per cent, 9.2 per cent and -10.3 per cent, respectively.
On EPF’s presence in the United Kingdom, Shahril said it had been selling some assets for good returns.
“We have been investing in the UK since the financial crisis in 2008 and 2009. We invested more in equities than properties.
“Since 2013 and 2014, we have been selling quite a number of commercial properties and assets, mostly because we have already taken huge returns.
“A lot of the returns have been re-invested in hard assets in Europe and North Asia. On the equities front, we remain invested in the UK market which has benefited from the weakening of the pound,” he said.
Shahril said EPF was very comfortable with its asset portfolio in the UK.
It is also looking at redistributing its hard assets between different markets.
“We usually try to sell when the market is calm but there has quite a lot of fear due to Brexit and political uncertainties,” he added.
Last Saturday, EPF declared a dividend of 6.9 per cent for conventional savings, with a payout of RM44.15 billion.
The dividend is the highest since 1997.