Sometimes, investors are puzzled why the EPF trades regularly between buy and sell.

Sometimes, investors are puzzled why the EPF trades regularly between buy and sell.

The presumably unclear direction of trades is because the provident fund also appoints external fund managers (EFMs) who have the full discretion to buy or sell. As such, sometimes the EPF could be buying a stock but their EFMs could be selling the same stock on the same day.

In certain cases, one EFM buys but another EFM could be selling at the same time or a few days later. Hence, the disclosure by the EPF is a combination of trades by its internal fund managers as well as that of EFMs.

Due to the difference in opinion between the EPF and its EFMs, there is no clear signal of the direction of this powerful domestic fund.

The fund could be big, but they are not "united" and they are in fact competing with each other. This is also a way to generate liquidity in the market. .

Even if the fund is buying a particular stock persistently, we observe that the stock price may not seem to rise substantially.

This may be linked to the way the orders are placed - that is, they tend to buy lower after a completed trade.

Read here.