Malaysia’s Biggest Pension Fund Says Performed Strongly in 2020

Malaysia’s largest pension fund, the Employees Provident Fund, said Saturday it had a strong performance in 2020 and managed to navigate the economic and health crises caused by the pandemic.

The fund declared a dividend of 5.2% for 2020, according to a statement. The dividend, which amounts to a payout of 42.88 billion ringgit ($10.6 billion) for conventional saving holders, is lower than the 5.45% made for 2019.

EPF also declared a dividend of 4.9% for shariah saving holders, versus 5% a year earlier, amounting to a 4.76 billion ringgit payout.

“The quick spread of Covid-19 and its transmissibility made it a Black Swan event that many found challenging to manage,” chairman Ahmad Badri Mohd Zahir said. The pension fund “rebalanced” its investment portfolios based on how the pandemic, as well as global uncertainties such as the U.S presidential elections, U.S.-China trade dispute, and the impact of Brexit negotiations, influenced capital markets worldwide, he said.

EPF said its five-year real dividend average of 4.62% for conventional savings, and 4.32% for shariah, after adjusting for inflation, is still above its target of 2% for a rolling five-year basis.

Malaysia’s EPF Launches World’s First, Biggest Shariah PE Fund

The state pension fund’s total investment assets grew 7.9% on year to 998 billion ringgit in 2020, with their market value hitting 1.02 trillion ringgit at end-December, it said. Fixed income instruments made up 46% of investments, followed by equities at 42%. EPF has about 33% of its investment assets outside of Malaysia.

Looking forward, EPF’s emphasis on environmental, social and governance investing “will serve as an anchor and an effective risk mitigation tool,” according to Ahmad Badri.

©2021 Bloomberg L.P.

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