Employees Provident Fund Board ( EPF Board ) announced that it has outsourced a total of RM167.63 billion of investment assets to external fund managers as at 31 December 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, accounting for 16.66% of the EPF Board’s total investment assets.
Seeing this, many will complain that the EPF is unable to manage these funds well and needs to waste money outsourcing to external fund managers to manage these assets. Many will look at this from the perspective of a government agency outsourcing projects to other developers.
In fact, it makes perfect sense for the EPF to do so, as it draws on the capabilities of other fund managers to maximise the return on the investment of the assets.
EPF’s trading in the equity markets often causes sharp fluctuations in share prices and the 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 diversified strategies.
