KUALA LUMPUR, Feb 17 (Reuters) - Malaysia’s Employees Provident Fund (EPF), the world’s sixth-largest pension pool, declared a dividend rate of 6.35 percent for 2013, its highest in over a decade.
Income from equities accounted for two-thirds of its 31.2 billion ringgit ($9.44 billion) payout, and mitigated a drop in contribution from fixed income instruments.
“By having a diversified portfolio across many markets, we are able to take opportunities when they arise and reduce the overall risk to the fund,” chairman Samsudin Osman said in a statement.
The EPF, a key investor in Malaysia’s market for Islamic bonds, saw contributions from its fixed income portfolio drop 22 percent to 7.53 billion ringgit because of the absence of some one-off transactions, it said.
Lower interest rates globally and the reinvestment of maturing bonds at lower rates also had a negative impact, said the EPF.
A higher proportion of offshore investments paid off for the fund. Its overseas exposure rose to 20.9 percent of assets from 15.7 percent in 2012. “To secure a stable long-term yield and manage risks, we continue to expand our reach overseas and broaden our outsourced asset management,” it said.
$1 = 3.3052 Malaysian ringgit Reporting by Al-Zaquan Amer Hamzah; Editing by Andrew Torchia