The Employees Provident Fund (EPF) has declared a dividend of 6.15 percent for the financial year ending Dec 31, 2012, the strongest result in the early years of this millennium.

Its chairperson, Samsudin Osman, said the rate was 15 basis points higher than the six percent paid in 2011.

“It is also a new record, for RM27.45 billion will be disbursed to EPF members, up 12.2 percent from RM24.47 billion distributed the previous year.

azlan “EPF also recorded the highest gross investment income of RM31.02 billion in 2012, an increase of 13.91 percent compared to 2011,” Samsudin said in a statement.

He said despite an increasingly complex investment environment, the EPF maintained a steady upward momentum to record the strongest results since this millennium, supported by effectiveness of long-term investment strategies and disciplined and prudent approaches.

In addition, Samsudin said. in line with the Strategic Asset Allocation practised by the EPF, most of its asset investments continued to be confined to low-risk fixed-income and stable instruments.

10.06 percent returns

He said equity investment made up 38.77 percent of the total asset investment in 2012 while the remaining 3.59 percent and 2.42 percent respectively were in money market instruments and real estate and infrastructure.

“While we invested in various investments, they were largely in low-risk fixed-income instruments, for which the rate of return on annual investment (ROI) exceeded six percent for three consecutive years.

“Equity generated double-digit ROI of 10.06 percent, while returns from fixed-income instruments exceeded 5.5 percent, despite the current low interest rates,” he said.

At the same time, he said several one-off transactions in the capital market undertaken in 2012 had borne fruit for income from loans and bonds recorded the highest increase compared to 2011.

anti corruption day 091205 samsudin osman In addition, Samsudin said, in line with the Strategic Asset Allocation practised by the EPF, most of its asset investments continued to be confined to low-risk fixed-income and stable instruments.

Samsudin (right) said investment in the asset class contributed RM9.68 billion to gross investment revenue, up 33.62 percent or RM2.44 billion compared with 2011.

In line with low interest rates, he said the EPF was gradually reducing its exposure to conventional fixed-income assets and turning mature assets to produce higher returns such as equities and property within the limit of acceptable risks.

Backed by steady growth in both domestic and global equity markets in 2012, equity accounted for RM13.91 billion in revenue or 44.84 percent of gross investment income. 

Samsudin said investment in the asset class contributed RM9.68 billion to gross investment revenue, up 33.62 percent or RM2.44 billion compared to 2011.

In line with low interest rates, he said the EPF was gradually reducing its exposure to conventional fixed-income assets and turning mature assets to produce higher returns such as equities and property within the limit of acceptable risks.

Steady growth in equity markets

The statement said investment in government securities and bond equivalents generated RM6.26 billion, property and infrastructure (RM595.63 million), and money market instruments (RM574.91).

Samsudin said EPF investment assets as at Dec 31, 2012 amounted to RM526.75 billion, surpassing half a trillion ringgit and increased 12.31 percent from RM469.04 billion recorded the previous year.

Samsudin said it was a big challenge for the EPF to manage funds of more than half a trillion ringgit in its quest to provide strong returns amid low interest rate environment, continued uncertainty in global economy, and constraints in the domestic capital market.

“However, as a pension fund, EPF will continue to be guided by long-term investment objectives and prudent investment strategies to ensure sustainable and consistent returns for the well-being of members in their retirement,” he added.

EPF members can get a statement of their accounts showing the credited dividends at EPF kiosks or counters or through i-Account from tomorrow while those aged 55 years and above can also withdraw the dividends. 

- Bernama

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EPF expected to declare a dividend of 6pct and above