Sunday, February 20, 2011

My top 10 wish lists to EPF

After it declares 5.8% today, I have a wish list for EPF as I know it will not be able to sustain its performance over a long period unless it changes its style of investments. Consistency will not be easy to be achieved as it now has a large proportion of its investments into equity. I do not actually mind this as long as it manages to maximise its investment.

Top 10 wish lists

  1. Move more funds overseas - be careful though. Since your fund is not small, invest in only large cap companies. Companies that are tried and tested. Invest in companies that has strong dividend track record;
  2. Be more transparent - do not just list down the top 30 stocks, provide the rationale for your investments. We do not ask for you to reveal your rationale pre-investments as you do not want to give away your planning and secrets but please provide your reasoning for your doing so post-investments;
  3. reduce your holdings of Malaysian stocks - fundamentals are fundamentals be it overseas or local. By holding more than 10% of any company or worse still holding a controlling stake will do harm to you as an investor, more so a pension fund;
  4. do not hold more than 5% of any company - be an investor rather than someone that any company deems as potentially threatening. If you hold more than 5%, companies will have to start listening to you. You do not want to be that - be a passive investor;
  5. Corporate Bonds - while today bonds may not be returning that high, do look at them and consider private sector bonds - but only investment grades;
  6. do allow individuals to withdraw our savings in EPF before 55 years of age if it exceeds RM500,000 as you will want those money in our pockets rather than you manage it for us;
  7. reduce the employee's contribution to 5% from 11% currently if a person's annual income exceeds RM 150,000;
  8. invest into assets generating income both locally and overseas - your move into PLUS is the right one. Keep it up;
  9. invest into companies that has large free float;
  10. try not to invests into companies that are family controlled.

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