EPF expected to deliver 6.3-6.5% dividend for 2025, says economist

 Afzanizam Rashid says strong nine-month performance and strategic diversification keep the retirement fund on track for a solid payout.

The EPF declared a dividend rate of 6.3% for both its conventional and shariah savings accounts in 2024.

KUALA LUMPUR:

 The Employees Provident Fund (EPF) is expected to declare a dividend rate of between 6.3% and 6.5% for 2025, according to Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid.

He said the retirement fund remains on course for a respectable dividend payout for the year, based on its nine-month performance in 2025, which saw an 11% increase in gross investment income.

“The EPF’s conservative and responsible investment selection has enabled it to optimise its risk-return trade-off,” he said.

“Its exposure to global markets, totalling about 38%, along with a greater allocation to fixed income assets, provides a well-balanced asset mix and geographical diversification. This helps minimise portfolio risk while maximising investment returns.”

The EPF declared a dividend rate of 6.3% for both its conventional and shariah savings accounts in 2024.

Afzanizam added that as of the third quarter of 2025, equities and fixed income accounted for 46% and 45% of the EPF’s total assets, respectively, followed by real estate and infrastructure at 7%, and money market instruments at 2%.

Meanwhile, Universiti Teknologi Mara senior lecturer Juliana Kadir said the EPF’s strategy of diversifying its assets, both domestically and internationally, has contributed significantly to achieving higher dividend rates.

“In addition, the equity market has continued to strengthen, as seen when the EPF increased its shareholding in IJM Corporation Bhd to 20.4%, making it the largest shareholder in the construction company.

“The strengthening of the ringgit against other currencies has also played an important role in boosting the fund’s investments,” she said.

Juliana added that factors such as changes in global interest rates, currency stability, and geopolitical uncertainties – including US tariff adjustments and trade policies – could affect returns and market sentiment.

She also highlighted the rapid growth of the self-employed segment, which now exceeds three million individuals, as an important factor driving an increase in voluntary contributions, in line with structural changes in the labour market, including the rise of gig workers.

She predicted EPF’s dividends possibly moving within the range of 5.5% to 6.5% in the coming years, depending on the efficiency of the EPF’s investment strategy and the global market performance. - FMT