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Malaysia’s EPF reports investment income up 36% from year-over-year quarter

Shahril Ridza Ridzuan, chief executive officer of Malaysia’s Employees Provident Fund

Malaysia’s Employees Provident Fund reported investment income of 11.51 billion ringgit ($2.7 billion) for the quarter ended June 30, up 36% from the year earlier quarter on the strength of domestic equity gains and solid returns on the Kuala Lumpur-based fund’s overseas investments.

An EPF news release Friday said the fund ended the latest quarter with 759.8 billion ringgit in assets, up 1.7% from the prior quarter and up 10.2% from a year earlier.

CEO Shahril Ridza Ridzuan said in the release that all of the fund’s asset classes enjoyed healthy year-over-year gains in the second quarter but equities led the way, accounting for roughly 54%, or 6.2 billion ringgit, of total income.

Following three years of declines, Malaysia’s key Kuala Lumpur Composite index has rebounded this year, climbing 6.4% during the first quarter and adding another 1.4% in gains during the quarter ended June 30.

Mr. Shahril said the 29% of the EPF portfolio invested overseas remained “a significant revenue driver” for the portfolio, accounting for 32.5% of the latest quarter’s investment income.

Strong gains on overseas holdings, at an annualized 11.1% for the three years through June 30, helped the portfolio more than overcome a 3% appreciation of the ringgit vs. the dollar during the period, said Mr. Shahril.

The CEO said the EPF must continue to “diversify our portfolio into broader markets with better investment opportunities and greater liquidity” overseas to better meet “future market challenges.”