The Employees Provident Fund (EPF) has reported substantial growth in its domestic investments, reaching RM665 billion as of June 2023, reflecting a 9% increase compared to the previous year.
Deputy Finance Minister Datuk Seri Ahmad Maslan shared this information, projecting that the total domestic investment would reach RM700 billion by the end of 2023.
Ahmad Maslan explained that the EPF’s investment decisions are guided by the annual fund allocation determined by the EPF investment panel.
In recent years, over 80% of the total fund allocation was typically earmarked for investments in the domestic market.
“For the year 2023, the EPF has allocated RM97 billion, which represents 83% of its total investment funds, for domestic investments,” stated Ahmad Maslan during a parliamentary session.
He emphasised the EPF’s commitment to prioritize domestic investments and allocate a significant portion of its funds to the local investment market, including money markets at local banks.
To ensure effective and sustainable investment, the EPF panel follows a Strategic Asset Allocation (SAA) approach, strategically distributing EPF assets across various asset classes, geographical regions, mandates, and strategies in alignment with the EPF’s investment strategy as a retirement fund.
According to Ahmad Maslan, the EPF’s investment portfolio for 2022 to 2024 includes allocations of 45.5% for fixed income instruments, 42.5% for listed equity, 3% for private equity, 6% for real assets, and 3% for money market instruments.
In May 2023, Prime Minister Datuk Seri Anwar Ibrahim, who also serves as the finance minister, urged the EPF to increase its domestic investment to 70%, up from 64% in the previous year. Anwar stressed the importance of aligning EPF investments with the government’s priorities, including youth involvement, food security, and support for startups.
Addressing a supplementary question, Ahmad Maslan clarified that the government does not intend to permit targeted EPF withdrawals in the future.
He noted that the EPF had already allowed several rounds of withdrawals initiated by the government, amounting to RM145.5 billion, to assist members during various financial challenges.
Additionally, he mentioned the introduction of a Flexible Account in the 2024 budget to facilitate emergency withdrawals for all members, regardless of their income group. Specific details regarding the scope and limitations of this account will be announced at a later date.