EPF Recorded Drop In AUM For The First Time In History In 2022
Author Avatar
(Image: BusinessToday)

The Employees Provident Fund (EPF) said that it recorded a dip in its assets under management (AUM) for the first time in its history in 2022, which was attributed to the huge outflow of funds due to the multiple special withdrawals allowed during Covid-19.

According to the chief executive officer of the EPF, Datuk Seri Amir Hamzah Azizan, the provident fund’s AUM dropped marginally by 0.7% from RM1.01 trillion in 2021 to RM1 trillion as of 31 December 2022. This came after a total of RM145 billion was withdrawn by members via four withdrawal schemes between 2020 to 2022, namely i-Lestari, i-Sinar, i-Citra, and an RM10,000 special withdrawal facility.

Compounded by the challenging market condition in general, Datuk Seri Amir Hamzah explained that the EPF then had to rely on its diversification strategy – in asset classes, geography, and approaches – to achieve a sustainable performance. For instance, an active liquidity management was adopted to minimise the impact of the fund withdrawals; this was demonstrated in the EPF’s diversification into foreign assets and currencies.

(Image: The Star/Faihan Ghani)

In turn, the EPF was able to obtain additional gains with profits from non-domestic sources to boost its overall return. To note, the EPF’s foreign investment made up 36% of its investment assets as of 31 December 2022, contributing 45% of the fund’s total gross investment income.

Meanwhile, the chairman of the EPF, Tan Sri Ahmad Badri Mohd Zahir noted the investment climate is expected to continue being challenging in the short and medium term of 2023. Drawing from World Bank statistics, he said that emerging markets and developing economies will likely experience a growth deceleration of 2.7%, as compared to 3.8% in 2022. This is due to factors such as weaker external demand, high inflation rates, and further tightening of financing policies by central banks around the world.

“The continuing uncertainty underscores the need for a thoughtful approach that focuses on building resilience, while aligning with the EPF’s long-term investment objectives, in accordance with our strategic asset allocation,” said Tan Sri Ahmad Badri.

tan sri ahmad badri mohd zahir
(Image: The Star)

That said, the EPF reassured that it is confident in its existing investment strategy as the fund is looking at things on a long-term basis. “We are guided by asset allocation, [and] we have stringent allocation for the mid to long term. The fund has good fundamentals, good returns, and good dividend-paying stocks. These are companies that [we] continue to have [in our pockets],” said the chief investment officer of EPF, Rohaya Mohammad Yusof.

The EPF recently announced a dividend rate of 5.35% for Simpanan Konvensional and 4.75% for Simpanan Shariah. This will see a total payout of RM45.44 billion and RM5.70 billion for those saving in Simpanan Konvensional and Simpanan Shariah, respectively, bringing total payout amount for 2022 to RM51.14 billion.

(Source: The Edge Markets)

0 0 votes
Article Rating


Comments (0)

Notify of

Inline Feedbacks
View all comments
Top Personal Finance News Articles
Post Image
Petrol Price Malaysia Live Updates (RON95, RON97 & Diesel)
- 31st May 2023
We provide weekly updates on every Friday at 5pm on the prices of RON95, RON97 and Diesel in Malaysia and a chart that shows the movement of fuel prices across a 6-week period. Bookmark this page now!
Post Image
Astro 4K Ultra HD Broadcast To Be Available For Subscription By The End of This Year
Brian Chung
- 14th August 2018
By the end of 2018, Astro customers will be able to watch football matches in Ultra HD. Read on to know more about the 4k Ultra HD service.
Post Image
Touch n Go RFID: What Malaysian Road Users Need To Know
Jacie Tan
- 10th August 2018
Everyone’s talking about Touch ’n Go RFID being used at Malaysian highway tolls soon – here’s what you need to know about it.
Post Image
Best High Interest Savings Accounts In Malaysia (January 2023)
Pang Tun Yau
- 11th January 2023
Make your money work for you by depositing them into the best high-interest savings accounts in Malaysia!

Related articles

Related Posts Image
Related Posts Image
Related Posts Image
Related Posts Image