StashAway Malaysia’s Country Manager, Wong Wai Ken, believes EPF’s recently announced 6.30% dividend for 2024 should be viewed in the broader context of local and global market conditions. He emphasised that EPF’s ability to deliver stable and positive returns, even during financial downturns, reflects its strong strategic asset allocation.

Citing past performance, he noted that in 2022, when the S&P 500 dropped by 18% and bonds struggled, EPF still recorded a 5.35% return. Likewise, during the COVID-19 pandemic in 2020, when global markets plummeted before recovering due to stimulus measures, EPF managed a 5.2% dividend, despite disruptions caused by various withdrawal schemes introduced that year. Even in the 2008 Global Financial Crisis, when markets were in turmoil, EPF maintained a 4.5% dividend, demonstrating its resilience in navigating economic challenges.

Malaysians have generally received EPF’s recently announced 6.3% dividend for 2024 positively, particularly in comparison to 2023’s return of 5.5% and the ten-year average of 5.9%. The rate, which is the highest since 2017’s 6.9%, has been widely regarded as a strong performance.

Wong attributed this resilience to EPF’s strategic asset allocation, which he described as a well-balanced approach to wealth preservation and measured risk-taking. He explained that in 2024, EPF allocated 46% of its investment portfolio to bonds and 42% to equities, maintaining a diversified portfolio designed to generate stable returns while minimising risk. 

He also pointed out that 67% of EPF’s RM1.25 trillion fund was invested domestically, predominantly in fixed income, while 33% was allocated overseas. He highlighted that EPF’s foreign investments contributed 50.3% of its total investment income, which he noted was expected given the fund’s higher allocation to equities in global markets. Publicly available documents, he said, show that in 2023, 74% of EPF’s overseas investments were in equities, a strategy that benefitted from global equity market performance of 24% in 2023 and 19% in 2024.

According to Wong, Malaysians can learn from EPF’s investment approach, particularly in diversifying across different asset classes and tapping into global markets that offer better risk-adjusted performance. He noted that EPF’s long-term investment mindset serves as a model for individuals planning for retirement, as it encourages consistent contributions while benefiting from dollar-cost averaging.

“Diversifying into different asset classes and investing in overseas markets which have better risk-adjusted performance is a wise thing to do,” he said in a statement. 

He also emphasised that EPF’s contribution structure not only ensures disciplined savings but also allows individuals to accumulate wealth steadily over time. Wong pointed out that by contributing monthly, Malaysians are automatically saving for the future while simultaneously mitigating market fluctuations through dollar-cost averaging.

Wong reiterated that EPF’s ability to deliver steady returns over the years, despite economic uncertainties, reflects its strong investment strategy. He suggested that Malaysians looking to secure their financial future could benefit from applying similar investment principles, such as diversification, a long-term perspective, and disciplined savings habits.

• TAGS:
• 6.30%
• Employees Provident Fund
• Employees Provident Fund (EPF)
• EPF
• Investment
• StashAway Malaysia
• Wong Wai Ken