Malaysia’s Employees Provident Fund, Kuala Lumpur, allocated an additional 4 billion ringgit ($1.3 billion) to overseas real estate, bonds and stocks in the quarter ended March 31.
That boost lifted the EPF’s overseas exposure to 17.55%, or roughly 94 billion ringgit, of the fund’s total portfolio assets of 536.6 billion ringgit as of the end of the latest quarter, according to an EPF news release.
The EPF’s total portfolio assets as of March 31 were up just less than 2% from the prior quarter and 9.9% from the year before.
The EPF gained 11.2 billion ringgit for the quarter, half of which came from net contributions and half from market-related gains and income.
The news release pointed to the increase in non-domestic allocations as part of the EPF’s “diversification strategy to expand its overseas investments.”
Under Ministry of Finance guidelines, the EPF can allocate up to 23% of its investment assets in overseas markets.
Constraints in how much the fund can add to already considerable investments in public Malaysian companies make it “imperative for us to find suitable investments globally that fit our long-term diversification program,” Shahril Ridza Ridzuan, the EPF’s CEO, said in a news release.
Citing the prevailing low-interest-rate environment, unpredictable external factors and the continued fragility of the global economy, Mr. Shahril warned “it will not be an easy task to sustain the current level of investment performance in the quarters to come.”
Mr. Shahril couldn’t be reached immediately for further comment. EPF spokesman Nik Affendi Jaafar also couldn’t be reached.