EPF Q1 2025 investment income falls by 13% to RM18.31bn

EPF’s Q1 2025 income was driven by equity, fixed income, and real estate and infrastructure investments, with overseas assets making a strong contribution. Member and employer participation continued to grow alongside steady domestic performance.

The Employees Provident Fund (EPF) recorded a total investment income of RM18.31bn for the first quarter of this year ending 31 March 2025. This is a 13% decline from RM20.99bn in the same period last year. The figure includes RM1.02bn in unrealised gains from foreign exchange fluctuations, which will not be distributable as dividends under EPF’s policy.

Equity remained the largest contributor to the EPF’s income, generating RM10.81bn or 59% of total investment income. However, this was 23% lower than in Q1 2024, reflecting weaker performance in global equity markets and a challenging investment climate.

In contrast, fixed income, which includes Malaysian Government Securities and Equivalents, loans, and bonds, played a more stabilising role. They produced RM5.99bn or 33% of total income, providing steady returns and helping to balance the fluctuations seen in equities.

Other asset classes contributed in line with expectations. Real estate and infrastructure investments brought in RM1.08bn, while Money Market Instruments added RM0.43bn, both offering moderate and consistent income.

Looking at the total investment income by savings type, RM15.87bn was allocated to Simpanan Konvensional, with RM2.44bn attributed to Simpanan Shariah.

As of March 2025, the EPF held total investment assets of RM1.26tn, with 38% invested internationally. These overseas investments generated RM8bn, contributing 44% of the fund’s total Q1 investment income. Meanwhile, domestic investments, making up 62% of assets continued to deliver steady returns through dividends, interest, and sukuk profits.

Reinforcing its role as a long-term investor, the EPF said it has committed over 70% of its annual investment allocation to Malaysia, aiming to support national growth in line with the Government’s Ekonomi MADANI framework. Through the GEAR-uP initiative, it is also stepping up healthcare-related investments. This is a move aimed at addressing system gaps and promoting healthier retirements.

That said, the fund remains cautious as global uncertainties linger. Ongoing geopolitical tensions, elevated tariff risks, and uneven monetary easing across economies continue to cloud investor sentiment. The International Monetary Fund has trimmed its 2025 global growth outlook to 2.8%, and Malaysia’s own GDP forecast is also expected to come in slightly below the initial 4.5%–5.5% range.

Despite the economic headwinds, Malaysia’s labour market has held firm. The national unemployment rate improved to 3.1% in Q1 2025, down from 3.3% a year ago. During the quarter, 140,111 new members joined the EPF, bringing total membership to 16.3mn, with 8.88mn active contributors making up just over half of the national labour force. Employer participation also rose, with 19,600 new registrations, and total contributions climbed 15.1% year-on-year to RM33.54bn. Voluntary contributions, meanwhile, surged by 62% to RM7.02bn.

"In a more challenging and uncertain market environment, the EPF maintains a dynamic and well-diversified portfolio to help safeguard value and manage downside risks," said Ahmad Zulqarnain Onn, Chief Executive Officer, EPF.

Lead image / KWSP Malaysia