EPF intensifies investments

THE Employees Provident Fund (EPF) will be outsourcing US$1 billion (RM3 billion) to 8 fund managers for the global fixed income mandate.

For the domestic absolute return fixed income mandate, it will allocate RM500 million to two fund managers, said chairman Tan Sri Samsudin Osman.

"We will also be outsourcing additional funds to conventional and syariah equity mandates this year," he said in Kuala Lumpur last night.

Speaking at the External Portfolio Managers Awards ceremony, he said the outsourcing of new mandates is in keeping with the pension fund's diversification strategy.

"We would like to see the industry grow further in size and capabilities, and preferably mandates being locally managed. If not, there is no difference in us outsourcing directly to global fund managers that have no local presence," Samsudin said in his speech.

He added that in the next few years, the EPF will be outsourcing more regional and global mandates to external fund managers.

However, he stressed that the EPF's commitment to outsourcing is subject to the managers' ability to deliver results. It will terminate services by underperforming managers.

Samsudin said the EPF will intensify its investments in global equity and fixed income in line with its diversification plan to add value and provide a reasonable rate of return to its members.

He pointed out that in 2010, these two key areas had generated healthy earnings for EPF members, resulting to a 5.8 per cent dividend amounting to a total payout of RM21.61 billion, the highest in its history.

"Maintaining the present level of dividend rate is going to be tough going forward," he said adding that a solution to this is diversification abroad which he noted is not without challenges.

As at end of 2010, EPF's investments in overseas market stood at 10 per cent of its total assets, half the amount it is allowed to invest in international markets.

Samsudin said the EPF intends to increase its overseas exposure to the 20 per cent limit by 2013.

Meanwhile, Nomura Asset Management Sdn Bhd was announced 2010's "Best Overall Equity Portfolio Manager" and HwangDBS Investment Management Bhd and Aberdeen Asset Management Sdn Bhd were named as the first and second runner-up winners respectively.

The "Best 3-year Realized Return Equity Manager" award was also bagged by Nomura Asset Management while the "Best Risk-Return Equity Portfolio Manager" award went to by HwangDBS Investment Management Bhd.

AmInvestment Management Sdn Bhd emerged as the "Best Overall Fixed Income Portfolio Manager" and the "Best 3-Year Realized Return Fixed Income Manager". - By Roziana Hamsawi of btimes.com.my