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EPF ‘punts’ to profits vs other investment options?

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wpid-img-20150703-wa0016.jpgI was about to go to sleep when a friend sent a message into a WhatsApp group which I was part of. She forwarded the message in the image. An article about how EPF punts its way to profits. In case you do not understand this term inside the newspaper, the word punt comes from ‘punter’ A punter is someone who speculates rather than invests. So, in essence, it meant that EPF is ‘punting’ to get profits. I do not have the full article but I asked my friend what would she do with her money inside EPF if indeed she dislikes this. Perhaps she could withdraw the EPF money into some Unit Trust approved schemes instead?

She said, yes, that’s a good idea. Then, I told her that the fund managers in these funds, especially the equity ones would also be very aggressive with her funds. Otherwise, the return is not going to be worth of ‘Equity Fund.’ Thus, it meant that there is a possibility for losses as well as gains. Equity funds are always like that. Need the fund to be very safe? Then Bond Fund. Bond here has nothing to do with James Bond. This Bond fund meant the money that comes in will be stable. When it’s stable, well, it tend to be on the low side. Would we be satisfied with the percentage year after year?

Next option, perhaps putting into Fixed Deposit, if she is able to withdraw that EPF money? She agreed though that the interest rate for Fixed Deposit is too low. What about buying a property for rental income then? Well, this option is not really available unless your total EPF money is huge. Then again, if it is huge, I recommend not to touch the money. Use your other free money to invest and earn more, then add this to your EPF money when you retire and suddenly you can do a lot and can go to many places instead of watching TV day and night and eat bread to save costs.

Suddenly, the choices are not that many. I am not a fund manager of EPF but on a yearly basis, we can read about what is the percentage that is being invested overseas to diversity, what is the percentage that is in government bonds thus getting fixed income and all the other percentages. The current CEO of EPF is not someone who will authorise all 100% of the whole fund to be used for this ‘punt’ activity if whatever the report says is true.

Oh yeah, who is this EPF CEO? Briefly, his name is Datuk Shahril Ridza Ridzuan. He was appointed to current role in 2013. Was previously Deputy Chief Executive Officer (Investment) of EPF, since 1st December 2009. He holds a Master of Arts (First Class) from Cambridge University and Bachelor of Civil Law (First Class) from Oxford University and has been called to the Malaysian Bar and the Bar of England and Wales. Yes, both degrees are First Class. To be honest, he may still be wrong in some of his investment decisions. No one can predict the world economy correctly at all times. However, if I am compared to him, I think my percentage of being wrong is definitely higher. So, my tiny money would remain with EPF and I hope he takes care of my money well. I need it for my retirement in future. Oh yeah, EPF being used to save some “stupid” companies? Sure, sure, I am very sure you have your valid points. Happy investing in anything that you believe is best.

written on 4 July 2015

Next suggested article: Irresponsible and unethical and ‘just forward’

 

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