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Of the total distributable income, RM31.34bn was generated for Simpanan Konvensional and RM5.36bn for Simpanan Shariah.
Malaysia's Employees Provident Fund (EPF) recorded a total distributable income of RM36.70bn for the six months ending 30 June 2024 (H1 2024), 29% increase from RM28.4bn recorded in the same period the previous year (2023).
Narrowing down to Q2 2024, the EPF added in a press release on Tuesday (13 August 2024) that after write-downs, its total distributable income for the quarter stood at RM17.50bn. This was a 25% increase year-on-year (Q2 2023: RM13.98bn).
The distributable income does not include mark-to-market gains of securities that have not been realised.
Citing the factors that contributed to the H1 2024 increase, EPF Chief Executive Officer, Ahmad Zulqarnain Onn noted "favourable market conditions in Malaysia and internationally", while assets under management also observed growth to record RM1.21tn.
He said: "The Malaysian market has benefited from increasing investor interest in growth-oriented policies and fiscal reforms. International markets such as the US benefitted from continued solid macroeconomic conditions, declining inflation and anticipation of the beginning of an interest rate reduction cycle."
Despite "relatively calm market conditions", he cautioned that risks still persist as can be seen by the recent "sell-down in global markets and sharp increases in volatility caused by market participants unwinding some concentrated and crowded positions."
"As a long-term investor, the EPF will continue with its strategy of constructing a highly diversified portfolio driven by its strategic asset allocation," he commented.
Observations in Q2 2024
The following observations were made across areas of equity, fixed income, and real estate & infrastructure.
Equity
First, equity investments continued to be the main contributor of income for Q2 2024, standing at RM10.75bn after write downs. This accounted for 61% of the total distributable income in the quarter under review.
Better equity market performance, both domestically and in the global developed markets, drove income growth compared to the RM7.84bn recorded in Q2 2023, EPF added.
Write-downs for the period were marginal at RM0.69bn, due to active portfolio management by the fund managers and overall better equity market performance.
Fixed income
Next, fixed income continued to provide a steady stream of income, mitigating the impact from short-term market volatility and providing stability for the EPF’s overall income. This asset class, comprising Malaysian Government Securities and Equivalents, as well as loans and bonds, contributed 33% (RM5.72bn) to the Fund's total distributable income for Q2 2024.
Real estate & infrastructure
Finally, coming to real estate & infrastructure — this area registered an income of RM0.5bn in Q2 this year, while money market instruments generated RM0.53bn, in line with the prevailing interest and profit rates.
As at 30 June 2024, investment assets stood at RM1,211.53bn, of which 38% was invested in overseas investments. In the second quarter, the EPF’s overseas investments generated RM8.64bn, i.e., 49% of the total distributable income recorded.
The EPF allocated more than 80% of its new investment annual allocation to the domestic market, and remains dedicated to supporting and contributing towards achieving the goals outlined in the MADANI Economy framework.
Of the total distributable income, RM31.34bn was generated for Simpanan Konvensional and RM5.36bn for Simpanan Shariah.
How the labour market performance played a part in contributions growth
As cited by EPF, a resilient labour market led to a year-on-year decline in unemployment rate — from 3.5% in Q2 2023, to 3.3% in Q2 2024.
Partly attributed to this, H1 of 2024 saw the EPF receiving 235,032 new member registrations, bringing total membership to 16mn. Of this figure, 8.6mn are active members, representing 50% of Malaysia’s 17.15mn-strong labour force.
Further growth and records include:
- A total of 37,284 new employer registrations in H1, bringing the total number of active employers registered with the EPF to 610,357. Total contributions received increased from RM50.48bn in H1 2023 to RM57.35bn in H1 2024.
- Throughout the first half of 2024, the i-Saraan scheme recorded total contributions of RM1.61bn from 330,196 contributors, reflecting a 103% year-on-year increase from RM789.3mn and a 56% year-on-year increase from 211,361 contributors in 2023.
- A 39% growth in the number of voluntary contributors was recorded in H1 this year, resulting in 742,556 such contributors in total (H1 2023: 535,307). Total voluntary contributions in the period stood at RM7.51bn, a 91% increase from the RM3.93bn accumulated in H1 2023.
Illustrations on the data above can be found here.
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