EPF to grow foreign assets to 27%, says chief

The Employees' Provident Fund (EPF) intends to grow its foreign assets up to 27% over the next two years in a move to diversify its portfolio. Chief executive officer Datuk Shahril Ridza Ridzuan said the fund's foreign assets grew to 25% in 2015 from 23% in 2014, after an aggressive diversification exercise in global assets in the last five years. He said the diversification could help offset or balance out the varying market performance. "The absolute amount of money we put in the global market was tremendous, especially between 2008 and 2014. "Despite volatility in the ringgit, we've still been able to meet our target of 25% allocation in global assets," he said at a press conference in Kuala Lumpur today on EPF's dividend payment for 2015. He said the fund was mindful of its purpose when it acquired large amounts of foreign currency amid the ringgit's volatility. Shahril Ridza was also asked if the fund would face any constraint in carrying out its diversification exercise following Prime Minister Datuk Seri Najib Razak's call for government-linked companies to repatriate investments. To this, he said the government had never stopped the EPF from acquiring assets overseas as it understood the need for diversification of its asset base. Similarly, he maintained that the fund had also grown its domestic assets, albeit, at a slower rate. "We are doing it for several reasons. One, if you look at the Malaysian market, for the fund of our size, it is difficult to acquire the right assets in the right risk return curve that we would like over the long term. "And second, we're always mindful of overcrowding the local market and by putting too much of our own liquidity in the market, driving down yields across the board." Meanwhile, EPF plans to increase its real estate, infrastructure and private equity portfolio to between 8% and 10% of total assets under management within the next five to seven years. – Bernama, February 22, 2016.]]>