The Employees Provident Fund (EPF) Board,
with the approval of the Minister of Finance, today declared a dividend
rate of 6.35 per cent for the financial year ending 31 December 2013,
representing the biggest ever dividend payout of RM31.20 billion to its
members, up 13.66 per cent over the RM27.45 billion paid in 2012.
In
a statement today, EPF Chairman Tan Sri Samsudin Osman said: “Thanks to
our robust yet prudent investment strategies, our performance has been
consistently stable, especially in the past five years. Over the years,
we have been diversifying our portfolio, thereby spreading out the scope
of our assets to manage market risks and generate consistent returns.
It is worth mentioning that since the 2008 global financial crisis, the
EPF has declared compounded dividends of more than RM120 billion for
its members. Including the net annual contributions, our investment
asset size had recorded a strong rise; from RM342.01 billion in 2008 to
RM586.66 billion at the end of 2013.” (Refer to Table 1)
The dividend rate was declared on the back of a record gross investment
income of RM35.00 billion, a 12.81 per cent rise from the RM31.02
billion gross investment income recorded in 2012 (Refer to Table 2).
The 2013 dividend payout was derived after deducting the net impairment
allowance on financial assets, investment expenses, operating
expenditures, statutory charges as well as dividend on withdrawals.
As the EPF membership rose to more than 13 million, a total of RM4.91
billion was required to pay every one per cent dividend rate for 2013 (Refer to Chart 2).
This was 10.06 per cent higher compared with RM4.46 billion paid for
every one per cent dividend rate for 2012. The amount needed to pay a
one per cent dividend would continue to grow between eight and nine per
cent annually.
“The investment performance has led the EPF to achieve an annual return
on investment (ROI) of 6.97 per cent, a rise of 10 basis points from
2012. This is a manifestation of our sound investment principles and
diversified portfolio across different markets and sectors,” said Tan
Sri Samsudin.
Equities emerged as the largest contributor to the EPF’s gross
investment income in 2013, generating RM19.52 billion of income, a
significant increase of 40.39 per cent compared with RM13.90 billion
recorded in 2012. EPF’s equities portfolio generated double digit
realised returns, exceeding the performance of other similar funds.
“The
strong performance in our equity portfolio was helped by the local and
global indices reaching new highs. This was attributable to investors’
confidence in the stability and fundamental economic strength of our
domestic market with the conclusion of the 13th General Election. The
market-driven liquidities that followed had also facilitated us to lock
in large capital gains. The global equity environment has shown much
improvement, with many global indices exceeding the pre-2008 crisis
level,” Tan Sri Samsudin said.
Loans and Bonds recorded RM7.53 billion of income, a lower amount
compared with the previous year, in the absence of significant one-off
transactions which had contributed a large portion of returns to the
asset class in 2012. The lower returns were also reflective of the
prolonged low interest rates globally, as maturing investments were
reinvested at lower rates.
Real Estate and Infrastructure continued to show encouraging
performance in 2013, earning RM1.14 billion, a jump of 87.91 per cent
over RM606.05 million in 2012. The year under review also witnessed the
investments in Malaysian Government Securities and Equivalents continue
to be a key income contributor, achieving an income of RM6.19 billion,
while Money Market Instruments recorded RM627.86 million.
“Our achievements reflected the effectiveness of a balanced and
diversified fund. 2013 was a very good year for our equity investments
while the year before that showed us faring better in the fixed income
portfolios. By having a diversified portfolio across many markets, we
are able to take opportunities when they arise and reduce the overall
risk to the fund.
However, we remain cautious for the coming year as volatility in
interest rates may possibly affect our returns, given that EPF funds are
predominantly invested in low risk fixed income instruments.
Additionally, we anticipate substantial volatility in emerging markets
as liquidity tightens globally,” added Tan Sri Samsudin.
The Fund’s total overseas exposure constituted 20.97 per cent of its
total investment assets based on book value as at end December 2013,
registering a rise from 16.98 per cent the year before. During the year
under review, the EPF had outsourced USD2.20 billion to the external
fund managers for global equity mandates, while a total of RM2.25
billion and RM850 million were injected into domestic fixed income and
equity mandates respectively.
“Managing a large fund is a great challenge, which necessitates the EPF
to employ a dynamic diversification programme. To secure a stable
long-term yield and manage risks, we continue to expand our reach
overseas and broaden our outsourced asset management. The success of
this strategy was reflected in the second half of 2013 as gains in
developed markets offset the weaknesses in emerging markets.
Given
the global economic slowdown and financial uncertainties, we remain
steadfast and our achievements are testament to the EPF management’s
continuous efforts and initiatives to maintain long-term financial
stability,” stated Tan Sri Samsudin.
The 2013 dividend can be viewed on the EPF’s Facebook page at Kumpulan Wang Simpanan Pekerja, Twitter at KWSPBuzz and on YouTube.
EPF account statement for the crediting of the 2013 dividend is now
available online via i-Akaun at myEPF website (www.kwsp.gov.my).
Alternatively, members can obtain their EPF account statement from EPF
Kiosks or any nearest EPF branch, starting Monday, 17 February 2014.
About the Employees Provident Fund (EPF)
The Employees Provident Fund (EPF) is Malaysia’s premier retirement
savings fund, providing basic financial security for retirement. The
Fund is committed to preserving and growing the savings of its members
in accordance with best practices in investment and corporate
governance. It will always be guided by prudence in its investment
decisions.
As a customer-focused organisation, the EPF delivers efficient and
reliable services for the convenience of its members and registered
employers.
The EPF continues to play a catalytic role in the nation’s economic
growth, consistent with its position as a leading savings institution in
Malaysia.
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