Total gross investment income for the third quarter (Q3 2022) ended Sept 30, 2022 amounted to RM12.32 billion, a decrease of RM1.65 billion or 12%, compared to RM13.97 billion in Q3 2021.
However, quarter-on-quarter, the total gross investment income for Q3 2022 was 11% higher compared to the RM11.14 billion recorded in Q2 2022, the EPF said in a statement today.
CEO Amir Hamzah Azizan attributed the improvement from Q2 to Q3 to the stabilised market conditions for both equity and fixed-income investments.
“There are ongoing concerns that high-interest rates will lead to a global recession, exacerbated by continuing geopolitical risks and interest rate hikes by the US Federal Reserve,” he said.
“However, notwithstanding these challenges, the EPF’s disciplined investment approach, guided by its robust strategic asset allocation and active portfolio management, helped to cushion the impact and allowed the EPF to deliver a steady performance, driven by the strong rebound in the domestic market,” he said.
In Q3 2022, equities accounted for 45% of EPF’s total gross investment income at RM5.49 billion, while fixed-income instruments — comprising Malaysian government securities and equivalents, as well as loans and bonds — contributed 39% or RM4.77 billion.
Real estate and infrastructure registered an income of RM1.67 billion, while income from money market instruments stood at RM390 million, in line with the expectations set for these asset classes.
In Q3 2022, the EPF’s overseas investments, which make up 36% of its total investment assets, continued to be a major contributor to its income, bringing in RM5.28 billion or 43% of its total gross investment income.
Meanwhile, as of September 2022, the EPF’s assets under management stood at RM961.01 billion.
Despite the numerous macroeconomic challenges, the EPF’s asset growth remained healthy, as contributions received for the first nine months of 2022 amounted to RM63.61 billion.
“From an investment standpoint, the EPF remains resilient and focused on what we can control, namely asset allocation, costs, and an overarching strategy that emphasises long-term sustainability of our investments and returns, in line with our strategic asset allocation.
“Though the uncertainty in international markets continues to be a strong concern, we are taking a ‘cautiously optimistic’ stance as we are not ignoring indicators that may suggest improvement in the macroeconomic outlook, such as the possible peak in global inflation and the Fed’s hints that interest rate increases will begin to slow in the coming months,” added Amir Hamzah.