EPF will continue to focus on cash-generating assets: CEO

 

The Employees Provident Fund (EPF) will continue to focus on cash-generating assets under its Strategic Asset Allocation (SAA) plan and will not consider investing in digital assets, said chief executive officer Ahmad Zulqarnain Onn.

He said the retirement fund is going to continue to invest in relevant asset classes that are consistent with its prudent investment strategy.

“The simple answer to digital assets is a no as for the EPF, the cash generation factor is incredibly important for us when it comes to investment.

“Similarly, this is the same reason that we genuinely do not invest in commodities, because a commodity is a physical asset with no cash generation capabilities,” he said during a question-and-answer session after announcing the EPF’s performance and dividend for FY2023 today.

Under the EPF’s SAA breakdown for the financial year 2023, 46 percent was allocated for fixed income, 42 percent in equity, 7 percent in real estate and infrastructure, and 5 percent in money markets.

EPF CEO Ahmad Zulqarnain Onn

The EPF remains the largest investor in the domestic market as its assets under management (AUM) rose to RM702.48 billion as of December 2023 from RM643.38 billion in 2022.

The retirement savings fund said deployment into domestic markets accounted for more than 80 percent of its investment allocation for 2023, providing capital to Malaysian companies and the economy as a whole.

As of December, the EPF held about 28 percent of the outstanding Malaysian Government Securities (MGS) and Government Investment Issues (GII) issuances, and about 12 percent of the FTSE Bursa Malaysia Top 100 Index market capitalisation.

The EPF’s participation in Bursa Malaysia in terms of value traded was 23 percent for FBM100 stocks and 31 percent for the FBM KLCI stocks.

On the ringgit’s performance, Zulqarnain said the retirement fund is in sync with Bank Nagara Malaysia’s stance on the valuation of the ringgit.

“We agree that the ringgit is undervalued, and for the EPF, it means purchasing more assets in ringgit,” he added.

- Bernama