KUALA LUMPUR (April 24): The Employees Provident Fund (EPF) said today it has invested RM4.86 billion in small- and medium-cap stocks on Bursa Malaysia through both its internal and external fund managers.
It noted that the equities portfolio remains the largest contributor to the pension fund's income at RM334.23 billion as at end December 2017, up 8% from RM309.48 billion in 2016.
"As at end-2017, we have invested in 192 small- and medium-cap companies and we are committed to find more good companies to add to our existing portfolio," EPF chief executive officer Datuk Shahril Ridza Ridzuan said in a statement today.
"As our funds continue to grow, we are constantly open to new investment opportunities that can provide income that are sustainable and long term.
"Our strong investment performance was largely driven by our investments in equities. We have been investing in stocks across various sectors, which include small- and medium-cap companies," he added.
Yesterday, Bloomberg reported that small-cap stocks in Malaysia have had a rough start to 2018 as investors switch to defensive blue chips ahead of the 14th General Election next month.
The FTSE Bursa Malaysia Small Cap Index has dropped 14% this year, its worst start to the year since 2008. In comparison, the benchmark FBM KLCI has gained 4.6% — making it Asia's second-best performing stock market — as foreign inflows near the US$1 billion mark.
Shahril said the fund will constantly monitor and assess the performance of the small- and medium-cap companies to see if they are suitable for investment and fit the retirement fund's risk return profile. Among the qualities that the EPF would look for in such companies include good governance, cost structure and sound business performance.
"The EPF has been doing co-investments with the small- and medium-cap companies to help their growth as we see future potential in them, which should also help to spur economic growth and boost EPF's investment income," he said.
The EPF's total gross investment income as at Dec 31, 2017 stood at RM53.14 billion, while total investment asset was RM791.48 billion with return on investment of 7.3%.