KUALA LUMPUR: The Employees Provident Fund (EPF) registered a higher investment income of RM33.19bil in the first half of 2023, which represented an increase of RM9.44bil from RM23.75bil in the same period in 2022.
Meanwhile, the retirement fund's investment assets grew to RM1.08 trillion, of which 38.6% were overseas investments.
The overseas investments generated RM11.07bil, or 61% of the total investment income recorded.
"The increase in overseas exposure was largely in part due to the positive movement in the global markets, pushing valuations of the EPF’s investment higher, as well as favourable foreign exchange movements," said EPF CEO Datuk Seri Amir Hamzah Azizan in a statement.
In the second quarter of the year alone, the EPF's total investment income was RM18.03bil, up from RM8.98bil recorded in the same quarter in 2022.
The EPF said equity investments were the main contributor to the income with RM9.6bil registered in Q2 as compared to RM4.07bil in the previous corresponding quarter.
"A significant portion of the improvement was due to proactive and timely realisation of profit, supported by the MTM gains of securities.
"After taking into account write downs, these numbers accounted for 53% of the total investment income for the quarter," it said.
The fund said its active portfolio management reduced the write downs in Q2 to RM350mil as compared to RM2.15bil in the same quarter in 2022.
"The performance of the global equity markets in the first half of 2023 had been positive, led by a run-up in the developed markets, notably in the US which continues to show resilience despite the rise in interest rates," said Amir Hamzah.
The 1H23 result was in contrast to the equity market performance in 1H22, which was several indices recording significant decline, and most markets including the US posting their worst first-half performance in decades.
In other asset classes, fixed income instruments, comprising Malaysian government securities and equivalents as well as loans and bonds, contributed 27% or RM4.83bil to the EPF's total investment income in Q2.
Real estate infrastructure meanwhile registered an income of RM2.72bil while money market instruments generated income of RM880mil, in line with expectations.
Moving forward, the EPF said it remains cautious over global economic growth, which is expected to continue to face persistent challenges in the remainder of 2023.
It said the effects of past monetary tightening, more restrictive credit conditions, and softening labour markets further test the resilience of global economic activity.
"Equity and bond markets will continue to remain fairly volatile given the varying expectations of the timing of the end of the hiking cycles by central banks, recession risks, policy uncertainty, and geopolitical tensions," added the fund.
On membership, the EFP said it has grown to 15.9 million with an all-time high of 8.47 million active members or 50.2% of Malaysia's 16.86 million labour force.
The number of new employer registrations grew 43,084 to 598,871, resulting in strong growth contribution of 16.8% to RM50.48bil.
