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EPF Outsources RM108 Billion To External Portfolio Managers

Recognition to the Top Performing Portfolio Managers of 2016

KUALA LUMPUR, 12 May 2017: The Employees Provident Fund (EPF) yesterday announced that a total of RM108 billion had been outsourced to external portfolio managers as at 31 December 2016, an increase of 10.36 per cent, compared with RM97.86 billion in 2015. This allocation, invested in both equity and fixed income instruments, represented approximately 14.77 per cent of the EPF’s total investment assets.

Speaking at the EPF External Portfolio Managers Annual Awards 2017, EPF Chairman Tan Sri Samsudin Osman said, “As we gear up towards becoming a trillion-ringgit fund, we will continue to outsource a portion of our funds as part of our diversification initiative, and to suitably leverage on the knowledge and skillsets of external fund managers that complement our own internal fund management capabilities.

“We will continue to increase our exposure in the markets we are investing in, especially in alternative investments and infrastructure. However, taking into account the prevailing market volatility and subdued growth, our expansion will be gradual and done in a prudent manner.”

The EPF’s investment objective remains to declare no less than 2.5 per cent nominal dividend on a yearly basis, and at least two (2) per cent real dividend on a three-year rolling basis. The EPF also continues to pursue asset diversification in order to mitigate portfolio risks; it plans to increase exposure into alternative investments to 10 per cent of total asset under management.

With about 45 per cent of investment assets being shariah-compliant prior to the launching of Simpanan Shariah in 2016, the EPF now expects to grow these assets by at least RM25 billion a year on average to meet the demand of its members.

“The competition for high quality Islamic assets is not only confined to investors in the Muslim world, given their attractiveness as an alternative ethical financing tool also appeal to Western pension funds alike. The EPF needs more quality Islamic assets to invest in, and we welcome external managers to join us in our commitment to growing our Shariah mandate,” said Tan Sri Samsudin.

In line with this, the EPF has also introduced the Best Domestic Sukuk Portfolio Manager award title for the first time to reward managers who have achieved good performance in managing the EPF’s domestic sukuk portfolio, as well as to acknowledge the growing prominence of this asset class in EPF’s investment portfolio.

The 2016 EPF External Portfolio Managers Annual Awards saw 15 other awards being presented to the top performing external portfolio managers. The list of winners is in Attachment 1.

The objective of this annual awards ceremony is to recognise the outstanding performance by external portfolio managers in managing EPF’s investment portfolio.

It is also notable that the EPF had, earlier this year, become a signatory to the Malaysian Code for Institutional Investors, as a testament to its commitment to promoting investment best practices and strong corporate governance among its investee companies. 

In line with this, Tan Sri Samsudin urged all portfolio managers to give full support and to use their influence as a force for good in corporate Malaysia, by ensuring that a high level of accountability and transparency is being practiced by investee companies at all times. 

The EPF’s exposure to shariah-compliant investments covering multi-asset classes currently exceeds 40 per cent of total assets.  As at 31 December 2016, the EPF’s total investment assets stood at RM731.11 billion, up 6.81 per cent from RM684.53 billion in 2015.

“The EPF sets high standards on performance and we appreciate the hard work of our external fund managers, who have shown full commitment in managing our funds,” said Tan Sri Samsudin.

Picture Caption: EPF Chairman Tan Sri Samsudin Osman (centre) with winners of the EPF Portfolio Managers Awards for 2016 at Grand Hyatt Kuala Lumpur on 11 May 2017.  With him are EPF Chief Executive Officer Datuk Shahril Ridza Ridzuan (eighth from right), EPF Deputy CEO of Investment Dato’ Mohamad Nasir Ab Latif (eleventh from right), Head of EPF Domestic Equity Department Zalinah A. Hamid (eleventh from left), Head of EPF International Equity Department Lim Tze Seong (sixth from left) and Head of EPF Private Markets Department Mohamad Hafiz Kassim (fifth from right).

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 EPF 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.

 

 

ATTACHMENT 1

LIST OF WINNERS FOR EPF PORTFOLIO MANAGERS ANNUAL AWARDS 2017

NO.

AWARD

WINNER

1.

Best 3-Year ROI Domestic Fixed Income Portfolio Manager 2016

Libra Invest Berhad

2.

Best 3-Year ROI Domestic Sukuk Portfolio Manager 2016

Nomura Islamic Asset Management Sdn. Bhd.

3.

Best 3-Year ROI Global Bond Portfolio Manager 2016

Goldman Sachs (Malaysia) Sdn. Bhd.

4.

Best 3-Year ROI Global Sukuk Portfolio Manager 2016

CIMB Principal Islamic Asset Management Sdn. Bhd.

5.

Best 3-Year ROI Domestic Equity Portfolio Manager 2016

Aberdeen Asset Management Sdn. Bhd.

6.

Best 3-Year ROI International Equity Portfolio Manager for MSCI Ethical Asia (ex Japan ex Malaysia) 2016

BNP Paribas Investment Partners Malaysia Sdn. Bhd.

7.

Best 3-Year ROI International Equity Portfolio Manager for FTSE Ethical World Developed 2016

BNP Paribas Investment Partners Malaysia Sdn. Bhd.

8.

Best 3-Year ROI International Equity Portfolio Manager for FTSE Shariah World Developed 2016

Nomura Islamic Asset Management Sdn. Bhd.

9.

Best Domestic Fixed Income Portfolio Manager 2016

Libra Invest Berhad

10.

Best Domestic Sukuk Portfolio Manager 2016

Nomura Islamic Asset Management Sdn. Bhd.

11.

Best Global Bond Portfolio Manager 2016

CIMB Principal Asset Management Sdn. Bhd.

12.

Best Global Sukuk Portfolio Manager 2016

BNP Paribas Investment Partners Najmah Malaysia Sdn. Bhd.

13.

Best International Equity Portfolio Manager for MSCI Ethical  Asia (ex Japan ex Malaysia) 2016

BNP Paribas Investment Partners Malaysia Sdn. Bhd.

14.

Best International Equity Portfolio Manager for FTSE Ethical World Developed 2016

BNP Paribas Investment Partners Malaysia Sdn. Bhd.

15.

Best International Equity Portfolio Manager for FTSE Shariah World Developed 2016

Nomura Islamic Asset Management Sdn. Bhd.