Malaysia's Employees Provident Fund posted record gross investment gains in 2020, lifting the value of its portfolio to 1 trillion ringgit ($247.5 billion) as of Dec. 31.
The Kuala Lumpur-based EPF made those advances despite granting participants early access to their retirement savings to help them survive the economic devastation of the coronavirus crisis.
A Feb. 27 announcement by the national defined contribution system said it had credited a 5.2% dividend payout to the accounts of its 13.8 million "conventional" plan participants, down from 5.45% the year before. It was the lowest level since the 4.5% pay out for 2008, the year of the global financial crisis.
The 1.12 million EPF participants who switched into the EPF's Shariah-compliant portfolio after that option was introduced four years ago, meanwhile, were credited with a dividend payout of 4.9%.
The EPF team walked a tightrope in 2020 "in ensuring that our members survive the difficult times while balancing their future needs," EPF Chairman Ahmad Badri Mohd Zahir said in a news release.
EPF was "one of the first pension funds in the world to provide assistance to its members during the pandemic," launching a program that allowed them to draw down savings in the smaller of their two EPF accounts designed to cover the costs of a broad range of needs, including housing, education and medical services, the release said.
For that "i-Lestari" facility, 5.16 million EPF participants withdrew a total of 18.1 billion ringgit during the year, the release said.
The EPF launched a separate program last November to give participants early access to their larger accounts that are focused on retirement savings. Though the news release offered no details regarding the amount of money withdrawn, a Jan. 6 annoucement said the EPF had approved 19.6 billion ringgit of withdrawals under the newer "i-Sinar" program.
Amid sharp market volatility during the year — with leading stock indexes plunging as much as 40% in the first quarter followed by a quick rebound on the back of unprecedented stimulus policies by central banks and governments — the news release said the EPF had recorded "its highest ever gross investment income" of roughly 61 billion ringgit, up from 50.3 billion ringgit the year before.
During the first quarter the EPF investment team "took the opportunity to rebalance its portfolio by acquiring shares that were fundamentally strong at attractive prices," and later in the fourth quarter locked in gains by selling, the release said.
For the year, the EPF's investment portfolio rose 7.9% to roughly 1 trillion ringgit.
Overseas exposures ended 2020 at 33% of the portfolio, up from 30.3% the year before and 26.7% as of the end of 2018.
By asset segment, EPF's portfolio ended 2020 with allocations of 46% in fixed income, 42% in equities, 7% in money market instruments and 5% combined in real estate and infrastructure.
At the end of 2019, the fund had allocations of 49% in fixed income, 39% in equities, 7% in money market instruments and 5% in real estate and infrastructure.
