Malaysia's EPF makes highest dividend payout ever
21 February 2011
One of Asia's largest and Malaysia's premier pension fund, the Employees Provident Fund (EPF), said it has declared the highest dividend payout amount ever to members, totalling RM21.61 billion (US$7.12 billion), an increase of 11.55% over the 2009 dividend payout of RM19.37 billion.
The latest payout translates into a dividend rate of 5.8% for the financial year ended December 31, 2010.
It is 15 basis points above the 5.65% paid out for the year 2009 and underscores an impressive year in which gross investment income reached a historical high of RM24.06 billion, reflecting a 39.76% increase over the RM17.22 billion gross investment income recorded in 2009.
“The remarkable investment income achieved in 2010 was especially driven by the performance of equity investments. The improved financial and economic conditions provided the market with sufficient liquidity, allowing profit taking activities throughout the year," said EPF Chairman Tan Sri Samsudin Osman.
“The dividend amount paid out is derived after deducting net impairment allowance on financial assets, investment expenses, operating expenditures and statutory charges as well as dividend on withdrawals.”
Buoyed by a good year for the equities market, equities investments were the largest contributor to the EPF’s gross investment income in 2010, representing 45.45% of EPF’s total gross investment income.
For the year under review, a total of RM10.94 billion was earned from equities, reflecting a significant 125.69% increase from RM4.85 billion earned in 2009.
Loans and bonds were the second largest investment income contributor in 2010, recording RM7.02 billion in gross investment income, compared to RM6.63 billion posted the previous year. Malaysian government securities were the third largest income earner for the year contributing RM5.30 billion compared to RM5.22 billion in 2009.
This was followed by money market instruments, which returned a gross investment income of RM703.52 million, up significantly from RM435.57 million in the preceding year. Meanwhile, a total of RM103.18 million was derived from property and miscellaneous income.
During the year under review, EPF total investment assets also continued to register healthy growth by crossing the RM400 billion mark to stand at RM440.52 billion as at December 31, 2010.
EPF’s investment strategies are broadly guided by its strategic asset allocation model, which was designed to fit EPF’s risk and return profile and to maintain consistent returns in the long run.
In 2010, about two-thirds of the EPF’s total investment assets remained in low risk fixed income instruments with stable streams of income.
“As a retirement fund, our primary objective is the preservation of capital while at the same time adding value to members’ retirement savings. In pursuit of this objective, we will continue to adopt a prudent investment approach backed by thorough research and in accordance with investment best practices to ensure members’ funds are well protected in the long term,” Mr. Samsudin said.
“While we are optimistic that the positive momentum will carry on into 2011, prospects for this year will continue to be dependent on both domestic and global economies gaining strength. As a retirement fund, the EPF will remain true to our goal by continuing to invest in accordance to our strategic objectives while taking stringent risk management initiatives to effectively manage uncertainties and threats,” he added.