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EPF declares 5.2pc dividend despite pandemic challenges
Published on: Sunday, February 28, 2021
By: Bernama
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Credit: focusmalaysia.my
Kuala Lumpur: The Employees Provident Fund (EPF) has declared a dividend of 5.2 per cent with a payout amounting to RM42.88 billion for Simpanan Konvensional and 4.9 per cent for Simpanan Shariah, with a payout totalling RM4.76 billion. Cumulatively, the total payout for 2020 is RM47.64 billion, EPF said in a statement Saturday.

“With an average five-year real dividend of 4.62 per cent for Simpanan Konvensional and 4.32 per cent for Simpanan Shariah after adjusting for inflation, the EPF has exceeded its strategic target of declaring at least 2 per cent real dividend on average for a rolling five-year basis,” it said.

Chairman Tan Sri Ahmad Badri Mohd Zahir said EPF managed to safeguard its members’ retirement savings well while meeting their immediate needs to deal with the current challenges.

“It was not easy at times as we had to walk a tightrope in ensuring that our members survive the difficult times while balancing their future needs,” he said. 

He said the quick spread of Covid-19 and its transmissibility made it a Black Swan event that many found challenging to manage.

“However, we were proactive in managing the pandemic and that helped us to ride through the challenges. Our focus on digitalisation enabled us to assist our members more efficiently and seamlessly while ensuring that we remain relevant to members who are more technology-savvy,” he added.

According to Ahmad Badri, the EPF has been successful in posting a strong performance in 2020 despite the once-in-a- lifetime event stemming from the pandemic and the unique circumstances the world found itself in, with the twin health and economic crises.

“The EPF’s speed of adaptability in its investment strategy and processes ensured that we were able to deliver optimum performance, and we further leveraged the strength of our approximately 250-strong investment professionals who diligently managed the portfolios and took proactive measures.

“Solid teamwork and digital infrastructure ensured that we could adapt seamlessly to the new work norms,” he said.

EPF also re-balanced its investment portfolios based on thorough consideration on how the pandemic and global uncertainties such as the US Presidential election in November 2020, the continuous US-China trade dispute, and the impact of the Brexit negotiations had influenced capital markets worldwide.

As for investment portfolio, Ahmad Badri said following lower net contributions during the year, the EPF’s ability to adapt to the current times ensured its investments were able to deliver long term sustainable returns under the new normal.

The fund recorded its highest ever gross investment income of RM60.98 billion, with RM6.15 billion allocated to Simpanan Shariah.

“The strong performance was due to the prudent approach guided by the fund’s overall Strategic Asset Allocation (SAA), which has kept the EPF resilient despite the unanticipated crisis. By asset class, Fixed Income instruments made up 46 per cent of investments, while Equities comprised 42 per cent. Real Estate and Infrastructure as well as Money Market instruments made up 5 per cent and 7 per cent, respectively,” said Ahmad Badri.

He said EPF is a long-term investor and remains steadfast with its diversification programme across asset classes, strategies, managers, markets, countries and currencies.

“The contribution from the overseas assets was also critical to our performance,” he said.

As at December 2020, EPF overall has 33 per cent of its investment assets outside of Malaysia across all asset classes.

Equities, particularly foreign equities, continued to be the driver of returns with a total income of RM28.71 billion. The private equity portfolio also demonstrated strong performance with a consistent income distribution.



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