KUALA LUMPUR (June 1): Malaysia's Employees Provident Fund (EPF) reported a 9.2% increase in its first quarter investment income at RM12.88 billion from RM11.79 billion a year earlier, driven by domestic and Asean markets which recorded positive growth.

In a statement today, EPF chief executive officer Datuk Shahril Ridza Ridzuan said the EPF managed to record consistent performance in its first quarter ended March 31, 2018 (1QFY18), despite developed markets experiencing a decline in 1Q18, following higher-than-anticipated inflation in the US. 

“Coupled with diversification into various markets, geographies and sectors, we have been able to cushion the decline in developed market equities, and this has resulted in consistent performance to our overall portfolio, with domestic equities emerging as an Outperformer,” Shahril said.

According to EPF's statement, equities made up 41.59% of EPF’s total investment assets in 1Q18. The EPF said equities contributed RM7.93 billion, representing 61.58% of total investment income for the quarter.  

50.53% of its investment assets were in fixed income instruments, which continued to provide consistent and stable income, the EPF said.

For 1Q18, fixed income investments recorded an income of RM4.76 billion, equivalent to 36.99% of the quarterly investment income, the statement added.

"During the quarter under review, real estate & infrastructure recorded negative investment income at RM107.38 million. This was primarily caused by the weakening of USD against other major currencies, including the Malaysian Ringgit, which impacted valuations on the investment. The negative investment income recorded for the asset class is, however, expected to be offset by inflow of investment income in the coming quarters. 

"As at end March 2018, the EPF’s overseas investments, which accounted for 27.30 per cent of its total investment asset, contributed 33.60 per cent to the total investment income during the quarter under review," the EPF said.