The retirement fund said equities contributed RM7.29 billion or 42% to the total gross investment income in Q3, while fixed income instruments registered RM8.18 billion.
Real estate and infrastructure as well as money market instruments contributed RM1.63 billion and RM230 million respectively, while net investment income (after impairment and cost write down for listed equities) came in at RM16.87 billion.
Chief executive officer Tunku Alizakri Alias said this year saw great volatility in the financial markets with rapid movements from one extreme to the other.
“Our financial positions over the first three quarters were affected by the volatility in market sentiments exacerbated by the uncertainties of the Covid-19 pandemic and continued fragile consumer sentiments,” he said in a statement today.
The global equity indices that the EPF tracks closely have rebounded from their lowest in March, but many have yet to recover to pre-pandemic levels seen at the end of 2019.
Investments in fixed income instruments, meanwhile, contributed 47% to the gross investment income in Q3, the EPF said.
“The widespread drop in yields provided an opportunity for the EPF to increase trading activities and capitalise gain, but the fund is cautious over the lower reinvestment yield and remains careful in ensuring that the long-term health of the portfolio is not jeopardised,” it said.
As of end-September, the fund’s investment assets stood at RM941.77 billion, out of which 68% was allocated to the domestic market while 32% was allocated to overseas markets, which contributed 45% to the gross investment income in Q3.
By asset class, fixed income instruments made up 49% of investments while equities comprised 39%.
Money market instruments and real estate and infrastructure made up 7% and 5% cent respectively of investments.
The portfolio reflects the EPF’s strategy to optimise returns within tolerable risk limits as guided by the strategic asset allocation (SAA).
As for its performance for the remaining months of the year, Tunku Alizakri said while the fund remained guided by the SAA, much would depend on rapid and effective responses to the pandemic to address the massive impact on the economy, ensuring the continuity of businesses, jobs and lives.
“Even as economies around the world struggle to recover from lockdowns, the rise in infections will be a serious impediment to any global economic recovery to pre-pandemic levels.
“We expect interest rates to remain lower for longer as central banks continue to ease the monetary policy to support their respective economies,” he added.
Throughout this challenging year, he said the EPF remained steadfast in its commitment to helping its members achieve a better future and also safeguard their long-term retirement savings by preserving capital and safely riding through this volatile period.
“This will be achieved by ensuring profits generated from our investments are done in a healthy and sustainable manner with prudent write down and impairment measures being proactively practised at all times,” Tunku Alizakri said.