EPF outsources 16.66% of its assets to external fund managers to manage, what does this mean?
The Employees Provident Fund Board (EPF) announced some time ago that the EPF has outsourced a total of RM167.63 billion of investment assets to external fund managers as of December 31, 2021, an increase of 8% from RM155.18 billion at the end of 2020. These investment assets are mainly invested in equities and fixed income instruments and account for 16.66% of the CPF Board’s total investment assets.
Seeing this many people will complain that the EPF is unable to manage the funds well and needs to waste money outsourcing to an external fund manager to manage the assets. Many will look at it from the perspective of a government agency outsourcing projects to other developers.
In fact, this is a very logical move by EPF, as it draws on the capabilities of other fund managers to maximize the return on asset investment. Sometimes EPF’s investment staff may hold different views from external fund managers, so the insight and skills of external fund managers need to be used to complement the internal management of the EPF.
EPF’s trading in the stock market often causes sharp fluctuations in share prices, and EPF needs to use external fund managers to trade in order to avoid sniping from other funds.
EPF has indicated that it is satisfied with the performance of these external fund managers and that the performance of the external fund managers is in line with EPF’s objectives and expectations. EPF has indicated that it will continue to employ these diversification strategies.
