KWASA DAMANSARA, 12 June 2024: The Employees Provident Fund (EPF) recorded total distributable income of RM19.20 billion for the first quarter ended 31 March 2024 (Q1 2024), an increase of 33.1% from the RM14.42 billion recorded in the corresponding quarter in 2023. The distributable income does not include mark-to-market (MTM) gains of securities that have not been realised.

EPF Chief Executive Officer, Ahmad Zulqarnain Onn said, “The performance of global markets in the first quarter of 2024 was marked by resilient global growth, notably in advanced economies. The FBM KLCI index has increased by 10% year-to-date, reflecting increased confidence in the growth and impact of various new economic and industry policies. Internationally, the US economy continued to grow, lowering expectation for Fed rate cuts during the year, and major stock indices showcased strong rallies during the first quarter, led by a run-up in financial, healthcare, and technology stocks.

“Whilst first quarter results have been strong, financial markets remain subject to a number of risks that have been prevalent, namely ‘high for longer’ interest rates, geopolitical and conflict risks, and changes in policies resulting from a large number of elections being held in a number of large economies this year,” added Ahmad Zulqarnain.

During the quarter under review, income from Equities increased to RM13.15 billion, compared to RM8.69 billion recorded in Q1 2023. The asset class remained the top income contributor at 68% of total distributable income. The increase in income is attributed to the fund managers’ proactive strategy in realising capital gains during the market rally, taking advantage of the favourable conditions before the uncertain environment anticipated in the coming quarters. 

Fixed Income instruments continue to be the anchor for the EPF, providing a steady stream of income and mitigating the impact from short-term market volatility. This asset class, predominantly Malaysian Government Securities (MGS), contributed 27% or RM5.14 billion to the total distributable income for Q1 2024. 

Real Estate and Infrastructure registered an income of RM0.22 billion in Q1 2024, while Money Market instruments generated RM0.69 billion, in line with the return expectations set for these asset classes.

The EPF’s overall investment assets as at March 2024 grew to RM1.19 trillion, of which overseas investments account for 38% of the total assets. The EPF’s overseas investments, which were mainly in equities, continued to outperform and add value to the EPF’s overall return as they generated RM9.88 billion in income, representing 51% of the total distributable income recorded. 

Meanwhile, the EPF’s domestic investments account for 62% of total assets and mainly invested in Fixed Income instruments, continued to provide long-term income stability through interests and profits. The EPF remains dedicated to supporting and contributing to the growth of Malaysia’s economy, by continuing to allocate more than 80% of its new investment annual allocation to the domestic market. 

A total of RM16.56 billion out of the RM19.20 billion total distributable income was generated for Simpanan Konvensional, and RM2.64 billion for Simpanan Shariah. 

 

EPF raises expectations for global growth, yet key risks remain

Ahmad Zulqarnain said the EPF is keeping an optimistic outlook for the domestic economy, which started 2024 on a firm footing, recording an acceleration in growth to 4.2% in Q1 2024. The country’s labour market remains healthy, with employment and the labour force participation rate continuing to rise.

He added that Malaysia is expected to continue recording solid growth in 2024, supported by continued strength in domestic demand and a recovery in exports. Bank Negara Malaysia forecasts that Malaysia’s economy will grow at a rate of between 4% and 5% this year and that inflation will stay moderate, averaging between 2% and 3.5%.

The outlook for global growth this year has become more positive. However, risks remain high due to uncertainty surrounding the impact of monetary policy tightening on growth and financial market stability, China’s property market crisis, as well as geopolitical tensions that could push commodity prices higher and threaten global economic growth.

The EPF will continue to implement robust risk management strategies to identify and mitigate risks associated with international trade and geopolitical developments. The EPF will also closely monitor the potential outcome of the US presidential election, which is expected to influence global market movements and sentiment. 

Malaysia’s robust economy has led to a resilient labour market, with the unemployment rate dropping to 3.3% in Q1 2024, from 3.5% in the same period last year. During the same period, the EPF saw 107,105 new member registrations by March 2024, bringing the total membership to 16.1 million. Out of that amount, a total of 8.6 million were active members , which now represent 50% of Malaysia’s 17.1 million labour force . 

New employer registrations also showed strong growth of 20,080 during the period, bringing the total number of employers registered with the EPF to 608,433. Total contributions received increased from RM25.83 billion in Q1 2023 to RM29.13 billion in Q1 2024 (Refer Chart 1).

The quarter under review also witnessed the EPF maintaining an active-to-inactive member ratio of 53:47 in Q1 2024, consistent with the same period in the previous year, with 8.6 million active members from a total membership of 16.1 million.

To ensure more Malaysians from the informal sector and gig workers receive formal social protection coverage, the EPF continues to expand its i-Saraan coverage, enabling workers in the informal sector or without formal income to save for retirement with the EPF while also receiving government incentives. Throughout Q1 2024, i-Saraan recorded new registrations of 146,171, boosting its total i-Saraan membership to 1.4 million, representing an increase of 43.9% from 997,659 in the corresponding quarter last year. 

1 Active members refer to members who contributed at least once in the last 12 months

2 Labour Force Statistics Report, March 2024; Department of Statistics Malaysia, report released on 10 May 2024

 

“The increase in the number of Malaysians opting to save with the EPF, as well as current members making voluntary contributions, signifies the continued economic growth momentum of the country elevated by sound Malaysia MADANI policies,” said Ahmad Zulqarnain, adding that the EPF will continue to enhance its capabilities to meet the evolving needs and expectations of members and employers, as well as build up its portfolio performance guided by its long-term Strategic Asset Allocation (SAA).

TABLE 1: EPF Q1 2024 Results
Portfolio	Asset % of total investment asset	Distributable Income (RM billion)	As % of income
Equities	43%	13.15	68%
Fixed Income Instruments*	46%	5.14	27%
Money Market Instruments	5%	0.69	4%
Real Estate and Infrastructure	6%	0.22	1%
Total	100%	19.20	100%

* Contributions from Malaysian Government Securities & Equivalent, Loans and Bonds

CHART 1: TOTAL CONTRIBUTIONS RECEIVED

 

Issued by the EPF Media Desk 
Corporate Affairs Department
12 June 2024