Malaysia’s Employees Provident Fund announced its investment portfolio ended 2013 with assets of 586.7 billion ringgit ($178.2 billion), up 11.4% from the year before.
The latest annual gain was composed of a 6.97% investment return for the year, for record gross investment income of 35 billion ringgit, combined with mandatory contributions by employees and employers of more than 10% of employees’ paychecks.
According to an announcement Sunday on the EPF’s website, the sovereign wealth fund credited a 6.35% dividend payout to member accounts for the year — a record payout in ringgit terms of 31.2 billion ringgit, up 14% from the year before.
In the announcement, Samsudin Osman, chairman of the Kuala Lumpur-based EPF, said its continued efforts to diversify its portfolio, in line with “robust yet prudent investment strategies,” have yielded consistently stable performance.
The EPF announcement noted the fund’s total overseas exposure rose to just less than 21% by the end of 2013, up four percentage points from the year before, with an additional $2.2 billion outsourced to external fund managers for global equity mandates during the year.
The fund’s allocations to equities, domestic and overseas, ended the year at 252.1 billion ringgit, or roughly 43% of the overall portfolio, up from 38.7% the year before.
All other asset classes saw their share of the portfolio edge lower.
As of Dec. 31, the EPF’s allocation was 43% equities, 26.3% loans and bonds, 26.1% Malaysian government securities and equivalents, 2.5% real estate and infrastructure, and 2.1% money market instruments.
For the year ended Dec. 31, 2012, the allocation was 38.7% equities, 28.5% loans and bonds, 26.7% Malaysian government securities and equivalents, 2.5% real estate and infrastructure, and 3.6% money market instruments.
For the year, investment returns on the portfolio’s equity holdings came to 19.5 billion ringgit, up 40% from the year before, more than offsetting a 22% decline in returns from bonds and loans to 7.5 billion ringgit, reflecting the low-interest-rate environment during the year.
Looking to the future, Mr. Samsudin said, “We remain cautious for the coming year as volatility in interest rates may possibly affect our returns,” and substantial volatility in emerging markets might result from moves to tighten global liquidity.