Bold takeaway: The EPF is poised to reward its savers with a dividend around 6.3%–6.5% for 2025, signaling steady, careful growth rather than flashy risk-taking—and here’s why that matters to you. And this is the part most people miss: the method behind the numbers hinges on disciplined diversification, prudent risk management, and a mix of domestic and global investments that balance potential gains with protection against volatility.
KUALA LUMPUR (Feb 16): The Employees Provident Fund (EPF) is anticipated to declare a dividend rate of between 6.3% and 6.5% for 2025, according to Dr. Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia Bhd.
For 2024, the EPF posted a dividend rate of 6.3% for both its conventional and Shariah savings accounts.
Dr. Afzanizam explained that the EPF’s nine-month 2025 performance shows an 11% rise in gross investment income, indicating the fund remains on track to deliver a solid dividend for the year. He credited the EPF’s conservative and responsible approach to investment selection, which optimizes the risk-return balance.
He noted that the EPF’s exposure to global markets—about 38% of assets—along with a heavier emphasis on fixed-income assets, creates a well-rounded asset mix. This diversification helps reduce portfolio risk while enhancing investment returns.
As of the third quarter of 2025, equities and fixed income represented 46% and 45% of the EPF’s total assets, respectively, with real estate and infrastructure at 7% and money market instruments at 2%. Each asset class fulfills a distinct role: equities aim for capital growth, fixed income focuses on capital preservation, and money markets support liquidity management.
Dr. Afzanizam highlighted that equities typically carry a higher risk premium, while fixed income and money market instruments come with comparatively lower risk. This combination allows the EPF to pursue higher returns while maintaining prudent risk control.
Meanwhile, Dr. Juliana Mohamed Abdul Kadir, senior lecturer at Universiti Teknologi MARA’s Faculty of Business and Management, praised the EPF’s asset-class diversification and its domestic-plus-international investment approach for lifting dividend potential.
She also pointed to the equity market’s strength, noting EPF’s increased stake in IJM Corporation Bhd to 20.4%, making EPF the largest shareholder in the construction firm. Additionally, a stronger ringgit against other currencies has supported the country’s investment returns.
Dr. Juliana cautioned that shifts in global interest rates, currency stability, and geopolitical factors—including changes to United States tariff policies—could influence returns and investor sentiment.
She also observed the rapid growth of the self-employed segment, now surpassing three million people, reflecting structural changes in the labour market and the rise of gig work. This trend has contributed to higher voluntary contributions.
Looking ahead, she anticipates dividends may hover in the 5.5%–6.5% range in coming years, with movements driven by global market performance and the EPF’s own investment strategy efficiency.
Uploaded by Liza Shireen Koshy
