Total gross investment income for the second quarter (Q2) was, however, lower at RM14.77 billion against the RM15.12 billion recorded in the same quarter last year, the retirement fund said.
Chief executive officer Amir Hamzah Azizan said EPF delivered a resilient performance in the first half of this year, driven by the progressive recovery of the equity markets and most asset classes amid the global rebound.
“Equities continued to be the main contributor of income for Q2 2021 at RM7.89 billion, accounting for 53% of total gross investment income,” he said in a statement today.
During the quarter, a total of RM0.21 billion was written down for listed equities compared to RM1.66 billion in Q2 2020 following the continued recovery across global markets. The cost write-downs are part of the fund’s internal policy to ensure a healthy portfolio.
EPF said that after these write-downs, it recorded a total of RM14.56 billion of investment income in the quarter, up 8% from RM13.46 billion a year earlier.
Fixed income instruments contributed RM5.28 billion or 36% to the gross investment income in Q2 2021, down from the RM6.17 billion recorded in Q2 2020 due to lower trading gains.
According to EPF, its diversification into different asset classes, markets and currencies continued to provide income stability and added value to the fund’s overall returns.
As at end-June, its investment assets stood at RM989.14 billion, of which 37% was invested overseas.
On i-Sinar and i-Citra facilities, the EPF has to date disbursed RM67.6 billion to assist members affected by the pandemic.
On the outlook for the remaining half of the year, Amir said the country’s recovery prospects are dependent on how the Covid-19 situation plays out in the near term.
“While we are confident that the government’s various stimulus packages and initiatives will keep business sentiment strong and boost domestic demand, we are very concerned about the retirement security of the people, especially with 46% of EPF members below the age of 55 having less than RM10,000 in their account.
“The pandemic has led to a significant drop in the percentage of members meeting the basic savings threshold (RM240,000 at age 55) from 36% to 27%, pursuant to the Covid-19-related withdrawals to supplement their income during the crisis,” he said.
He noted that the pandemic had also triggered a dramatic rise in the number of gig workers in the country.
“While this has helped workers survive, many of these workers are falling back on their retirement security due to the irregular and unstable income.
“Additionally, they are facing vulnerabilities in terms of employees’ benefits and coverage on social protection,” he said.
Amir said the key element of EPF’s strategy going forward is to include gig workers, as well as those in informal sectors, into its scheme so that they can start to save as early as possible and plan for their retirement.