For those who don’t know how anything about investment such as stock, bond, or property must have least idea that they have already invested, in not just one, but few of the asset classes. Yes, I’m talking about EPF the Malaysian Employees Provident Fund. Whoever have a job or working for a company contribute part of their monthly income to EPF. However, not many knows what exactly the EPF fund manager does to the money, or at least not very clear.
Below are the percentage of asset allocation for EPF with actual amount:
1. Loan and bonds – 41% (148.12 Billions)
2. Government securities – 27% (97.35 Billions)
3. Stock market – 26% (94.38 Billions)
4. Money market – 5.5% (19.75 Billions)
5. Property – 0.4% (1.49 Billions)
The percentage in term of income with actual amount from the asset allocated in 3rd quarter 2009:
1. Stock market – 42.71% (2.34 Billions)
2. Loan and bonds – 34.5% (1.89 Billions)
3. Government securities – 20.8% (1.14 Billions)
4. Money market – 1.59% (87.31 Millions)
5. Property – 0.4% (21.37 Millions)
As you might realize at first look, the best performing asset in term of allocated percentage is stock which bring in 42.7% out of total income even though percentage of fund allocated to stock market is only 26%, which is 1.64 income %-to-allocation % ratio. No surprise, as of March of 2009, the market bottoms, EPF with huge monthly cash in flow have been scooping up stocks in bargain price, and by 3rd quarter of 2009, whatever that is lost in 2008 has been reclaimed. While the second performing asset is property market with allocated 0.4% (small it is) giving 1 income%-to-allocated % ratio. In third place, loan and bonds, with 41% allocation, it is able to make up to 0.84 in term of income%-to-allocated% ratio. In term of amount generated, the sequence is stock market, loan and bonds and government securities. Property generated the least income in term of amount also due to the size of allocation.
With the score being calculated for each asset class, it also explains the latest move of EPF. Recently EPF announced to step up investment in oversea equity market to 10% of total fund over the next two years. Equity is the best performing asset class in 2009. Being the biggest shareholder in Malaysian Resource Corporation Berhad (MRCB), EPF further extend a conditional general offer to buy out the company. EPF also joint venture with government of Malaysia to develop a 3000 acres land in Sungai Buloh that after developed will worth around RM5 Billions. Property is the second performing asset.
So now you have some idea of where your money go to, what do you feel?
Excited or worry?