EPF’s 1Q investment income slips 13% to RM18.31b on market volatility

THE Employees Provident Fund (EPF) recorded RM18.31 billion in total investment income for the first quarter ended March 31, 2025 (1Q25), marking a 13% decline from RM20.99 billion in the same period last year, as global markets faced renewed volatility and policy uncertainty.

In a statement today, the EPF attributed the lower income to weaker equity performance and external economic headwinds.

Of the total income, RM1.02 billion were unrealised mark-to-market gains from currency fluctuations, which are not distributable as dividends.

“Global markets turned volatile early in the year on renewed trade frictions and policy uncertainty,” said EPF CEO Datuk Seri Ahmad Zulqarnain Onn.

“Our diversified global portfolio cushioned the impact and kept the EPF on course for long-term value creation.”

Equities lead but drop sharply

Equity investments contributed RM10.81 billion – down 23% year-on-year – amid broad-based weakness across global equity markets.

Nonetheless, equities remained the top-performing asset class, accounting for 59% of the total investment income.

Fixed income instruments contributed RM5.99 billion or 33%, real estate and infrastructure RM1.08 billion, and money market instruments RM430 million.

Of the total income, RM15.87 billion was generated for Simpanan Konvensional and RM2.44 billion for Simpanan Shariah.

Portfolio snapshot

As of end-March, EPF’s total investment assets stood at RM1.26 trillion, with 38% invested overseas.

International investments generated RM8 billion or 44% of total income, reflecting the fund’s commitment to global diversification.

Domestically, 62% of total assets remain invested, supporting long-term income stability and Malaysia’s economic development.

The EPF reiterated that over 70% of its annual allocation continues to be channelled into domestic investments, aligned with the government’s Ekonomi Madani agenda.

Slower outlook ahead

The EPF struck a cautious tone for the months ahead, warning of a more challenging global economic environment amid persistent geopolitical tensions and trade uncertainties, particularly between the US and China.

The IMF has downgraded global growth forecasts to 2.8% for 2025, while Malaysia’s own GDP growth projection is expected to be revised slightly lower from the initial 4.5%-5.5% range.

“In a more uncertain market environment, the EPF maintains a dynamic and diversified portfolio to help safeguard value and manage downside risks,” Ahmad Zulqarnain said.

Growing membership and contributions

Despite economic headwinds, Malaysia’s job market remained resilient, with unemployment falling to 3.1% in 1Q25.

EPF membership rose to 16.31 million, including 140,111 new members in the quarter.

Active members stood at 8.88 million, while total contributions jumped 15.1% year-on-year to RM33.54 billion. Voluntary contributions surged 62% to RM7.02 billion.

The number of active employers registered with the EPF reached 616,558, with 19,600 new employer sign-ups during the quarter. — TMR