The Employees Provident Fund's (EPF) investment income for the first quarter ended March 31, 2012, rose RM1.21 billion or 18.52 per cent to RM7.74 billion compared to the same period last year.

Chief Executive Officer Tan Sri Azlan Zainol said the fund's performance was primarily driven by gains realised in equities, when the EPF capitalised on the positive equity market during the quarter by taking profits early in the year.

"The results for the quarter reflect the success of our active but disciplined investment approach that allows the fund to react when opportunities present themselves," he said in a statement.

Investment income from equities amounted to RM3.62 billion, up from the RM3.23 billion in the same quarter last year.

Loans and bonds brought in RM2.49 billion in investment income compared to RM1.77 billion in the corresponding period of 2011.

One of EPF's major investment transactions during the quarter includes its subscription to the global sukuk issued by PLUS Bhd following the privatisation of PLUS Expressways Bhd in December last year.

Investment assets rose to RM488.54 billion from RM450.26 billion in the same quarter last year.

Total contributions of RM12.74 billion received during the quarter exceeded the total amount of RM8.42 billion withdrawn, resulting in a RM4.32 billion net inflow of funds.

The EPF's total overseas exposure constituted 13.96 per cent of its total investment cost.

During the quarter under review, an additional US$1.2 billion in investments was made in global equities and real estate.

Azlan said the EPF planned to step up its investments in overseas real estate and infrastructure deals as well as Islamic and conventional bonds.

It would take into consideration the right opportunities and market movement and directions, with an intention to gradually increase its overseas exposure to between 18 and 19 per cent of total investments by year-end.

He assured members that the EPF is very selective and cautious in its venture into the global market and only invests after a thorough study is conducted.

On the outlook for the rest of the year, Azlan said: "Uncertainties surrounding the global economy, especially the ongoing sovereign-debt crisis in Europe, will continue to have a bearing on EPF's investment performance."

The EPF predicted a tough year going forward and would hold firm to its long term strategic asset allocation approach that provides the resilience necessary in the present challenging market conditions. -- Bernama