KUALA LUMPUR: The Employees Provident Fund's (EPF) total distributable income in 1H24 rose 29% to RM36.7bil from the same period last year, underpinned by better market conditions and increased contribution from equity investment.
The total distributable income comprised RM31.34bil generated for Simpanan Konvensional and RM5.36bil for Simpanan Shariah.
In the second quarter alone, the pension fund's total distributable income after write-downs was RM17.5bil, up 25% from RM13.98bil in the same quarter in 2023.
The distributable income does not include mark-to-market (MTM) gains of securities that have not been realised.
Meanwhile. the EPF's assets under management as at June 30, 2024, grew to RM1.21 trillion.
Said EPF CEO Ahmad Zulqarnain Onn, the growth in distributable income so far this year was owing to favourable market conditions in Malaysia and internationally.
"The Malaysian market has benefited from increasing investor interest in growth oriented policies and fiscal reforms.
"International markets such as the US benefited from continued solid macroeconomic conditions, declining inflation and anticipation of the beginning of an interest rate reduction cycle," he said.
However, he noted that risks persist as illustrated in the recent sell-down in global markets and sharp increases in volatility caused by market participants unwinding some concentrated and crowded positions.
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He said the EPF, as a long-term investor, will continue with its strategy of constructing a highly diversified portfolio driven by its strategic asset allocation.
Equity investments in 2Q24 remained the main contributor of income at RM10.75bil or 61% of the total distributable income after write downs.
The improvement in equity market conditions contributed to the increase in equity investment contribution from RM7.84bil recorded in 2Q23.
The EPF said write-downs for the period were marginal at RM690mil, due to active portfolio management by the fund managers and overall better equity market performance.
Meanwhile, fixed income, comprising Malaysian Government Securities and equivalents, as well as loans and bonds, contributed 33%, or RM5.72bil, to EPF’s total distributable income for 2Q2424.
Real estate and infrastructure registered an income of RM500mil, while Money Market Instruments generated RM530mil, in line with the prevailing interest and profit rates.
According to the EPF, 38% of its RM1.21 trillion of investment assets was invested overseas as at June 30, 2024, generating RM8.64bil or 49% of the total distributable income recorded in 2Q24.
However, it said more than 80% of its new investment annual allocation was put into the domestic market, dedicated to supporting and contributing towards achieving the goals outlined in the Ekonomi MADANI framework.
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On the labour market, the EPF said there was a drop in unemployment rate from 3.5% in 2Q23 to 3.3% in 2Q24.
There were 235,032 new members registrations in 1H24, which brought total membership to 16 million.
A total of 8.6 million or 50% of Malaysia's 17.15 million labour force are active members.
New employer registrations came to 37,284, bringing the total number of active registered employers to 610,357.
Total contributions received increased from RM50.48bilin 1H23 to RM57.35bil in 1H24 .
