Value of EPF’s listed equity portfolio swells to Rs. 112 b versus Rs. 84 b at cost

The value of the Employees Provident Fund (EPF) listed equity portfolio has increased to Rs. 112 billion as opposed to its cost of Rs. 84 billion, reflecting an unrealised gain of Rs. 28 billion, the Central Bank revealed yesterday. 

It said the EPF managed by the Monetary Board is Sri Lanka’s largest superannuation fund. It maintains its investment portfolio with the long-term objective of maximising the returns to its members while preserving the value of the fund. It operates within certain given risk parameters and has invested 94% of its funds in Government securities and the balance in listed and unlisted equities, corporate debentures, trust certificates and other money market instruments. Funds are invested in a diversified portfolio, across eligible asset classes as given in the Monetary Board approved Strategic Asset Allocation subject to stipulated limits. The market value of the EPF investment portfolio as at 31.12.2020 stood at Rs. 3.24 trillion. 

CBSL said that in accordance with its Investment Policy, the EPF had invested around 3% of its funds in listed and unlisted equities with a long-term perspective to generate adequate real rates of return. The performance of individual equities as well as the overall performance of the equity market and overall macro-economic conditions of the country fluctuate, and these changes impact the market value of the listed equity portfolio compared to the previous year. The valuation of the portfolio and the determination of its profitability is carried out as per the Sri Lanka Financial Reporting Standards.

“In keeping with the Financial Reporting Standards, the market value of the listed equity portfolio of the EPF as at end-December 2021 recorded a value of Rs. 112 billion against its cost of Rs. 84 billion, thereby reflecting a substantial unrealised gain of Rs. 28 billion in the portfolio,” CBSL said. 

In addition, the EPF also realised Rs. 4.7 billion during 2021 by way of scrip and cash dividends as well as capital gains. Further, the dividend income received during the three-year period, 2019 to 2021, was recorded at Rs. 2.5 billion on the unlisted equity investment portfolio of Rs. 9.6 billion.

In order to maintain transparency, EPF publishes the market value of its listed and unlisted equity portfolio on a quarterly basis on its website, and this information can be accessed through https://epf.lk/?page_id=2483.