PETALING JAYA: Economists broadly expect the Employees Provident Fund\u2019s (EPF) 2025 dividend to come in between 6.3% and 6.8%, supported by strong global asset performance, a more stable interest rate environment, and favourable domestic conditions such as a firmer ringgit and attractive bond yields.<\/p>\n
Speaking to SunBiz, some experts point to gains in equities, bonds and metals \u2013 boosted by AI-led market momentum and expectations of a dovish US Federal Reserve \u2013 while noting EPF\u2019s diversification and sizeable overseas exposure as key income drivers.<\/p>\n
However, others caution that while the payout would be strong, it likely sits near the upper end of EPF\u2019s long-term range, with a more sustainable level closer to 6.0% to 6.3%.<\/p>\n
Independent macro strategist Suresh Rama expects a dividend payout of between 6.5% and 6.8%, supported by global and domestic factors.<\/p>\n
\u201cI am expecting a dividend payout of between 6.5% and 6.8%. I believe the dividend yield will be higher than previously, as lower interest rates globally have favoured asset classes such as metals, equities and bonds,\u201d he said.<\/p>\n
Suresh pointed to the sustained bull run in the Dow Jones Industrial Average, supported by expectations of a dovish monetary policy outlook from the US Federal Reserve.<\/p>\n
\u201cThe emergence of AI and technology stocks is propelling various industries in the global market. This is becoming the new norm, rather than relying on traditional sectors that drove equity markets in the late 1990s and early 2000s,\u201d he added.<\/p>\n
Suresh said Bursa Malaysia, though defensive in nature, has remained steady and continues to serve as a buffer against volatility for local asset managers.<\/p>\n
He also noted that Bank Negara Malaysia\u2019s relatively accommodative interest rate environment has supported valuations of local corporate and government bonds. \u201cLower yields have pushed up bond prices, suggesting mark-to-market gains for bond portfolio holdings.\u201d<\/p>\n
In addition, metals have surged amid rising demand from AI-related industries, particularly those linked to rare earth minerals, benefiting segments exposed to the supply chain.<\/p>\n
Juwai-IQI Holdings chief economist Shan Saeed said the higher dividend projection reflects EPF\u2019s scale, diversification and asset allocation discipline, alongside a more stable global rate backdrop and domestic macro conditions anchored by Bank Negara Malaysia.<\/p>\n
\u201cA dovish Federal Reserve stance in 2026 would be supportive from a valuation perspective, while ringgit stability reinforces macro confidence,\u201d he said.<\/p>\n
Shan pointed out EPF declared a 6.30% dividend for both conventional and syariah savings in 2024, up from 5.50% in 2023 and 5.35% in 2022.<\/p>\n
\u201cThe fund manages more than RM1.2 trillion in investment assets, with approximately 37% to 38% allocated internationally, contributing roughly half of total income in strong years,\u201d he said.<\/p>\n
Shan described the fund\u2019s recent performance as the result of portfolio structure rather than short-term market timing.<\/p>\n
He said the post-zero interest rate era has recalibrated return expectations, with normalised real yields and resilient global earnings supporting what he views as a sustainable dividend band rather than a cyclical overshoot.<\/p>\n
However, Malaysian Rating Corporation Bhd senior economist Kamal Zharif Jauhari said a more sustainable long-term dividend range is around 6.0% to 6.3%, in line with historical performance.<\/p>\n
\u201cThe 10-year average hovering near 6.0%, and outpaces Malaysia\u2019s GDP growth. A dividend outcome of 6.3% to 6.5% would be slightly above the recent three- to five-year average.\u201d<\/p>\n
That said, he added, the dividend outlook should remain well-supported in the near term given the improving tone in Malaysia\u2019s capital markets.<\/p>\n
\u201cThis includes a firmer ringgit, attractive yields in MGS, and strengthening sentiment for domestic equities. This optimism is further underpinned by clear policy visibility through key national initiatives such as NSS, NIMP and NETR, which are crucial for driving investment flows and anchoring market confidence,\u201d Kamal Zharif said.<\/p>\n
Analyst Jason Loh Seong Wei said the higher projection could represent \u201cthe top of the cycle\u201d as the global economy is expected to slow in the second half of 2026.<\/p>\n
\u201cThis is when the full impact of US President Donald Trump\u2019s tariffs finally sets in \u2013 with the US as the centre and affecting much of the global economy, including Malaysia.\u201d<\/p>\n
He said the robust GDP growth in the US has at the same time been masking higher layoffs which would only increase this year.<\/p>\n
\u201cThe signs are pointing in the direction of a stagflationary situation, i.e., persistent inflationary pressure combined with weakening aggregate demand.\u201d<\/p>\n
The new Chairman of the Federal Reserve will be faced with the dilemma of whether to raise or lower federal funds rate or FFR given the real-world contradiction underlying the dual mandate of maintaining maximum employment and price stability.\u00a0<\/p>\n
Loh said the prospective incoming chairman of the Federal Reserve have been hinting at the liquidity trap whereby lowering the interest rates further would be ineffective, and hence his suggestion of shrinking the Fed\u2019s balance sheet to give policy space and capacity for future manoeuvring.<\/p>\n
\u201cWhilst the Federal Reserve under Kevin Warsh may portend a higher yield differential translating into capital inflows into our financial markets and sustaining a stronger ringgit, this doesn\u2019t bode well for our exporters who\u2019re already feeling the pinch from a stronger ringgit.\u201d<\/p>\n
He said domestic aggregate profits are expected to hit the wall going into the second half of the year.<\/p>\n
\u201cThis could then exacerbate foreign fund outflows resulting in the stock market taking a significant drop.\u201d<\/p>\n
He said it\u2019s expected that the EPF might take pre-emptive steps to mitigate the impact from such a scenario by readjusting its strategic asset allocation vis-\u00e0-vis towards fixed income.<\/p>\n
Former chief economist Wan Murezani Wan Mohamad said the dividend depends largely on investment performance, which is mainly a function of macroeconomic and financial market conditions.<\/p>\n
\u201cIn the context of EPF\u2019s dividend, the 6.30% to 6.50% expected range is quite respectable from a historical perspective, as such a range is well above its average over the last 10 years.\u201d<\/p>\n
Wan Murezani said EPF\u2019s ability to deliver such returns reflects its robust investment process, guided by a strategic asset allocation framework that ensures diversification across key asset classes such as bonds, equities and real estate.<\/p>\n
\u201cFurthermore, its exposures in foreign markets have also been a key in enhancing investment yield,\u201d he said.<\/p>\n
UCSI University Malaysia associate professor of finance Dr Liew Chee Yoong said the dividend projection suggests a strong year, but likely reflects the upper end of normal rather than a new baseline.<\/p>\n
\u201cEPF\u2019s dividends over the past 10 years have usually been between about 5.5% and 6%. So the projection of 6.3% to 6.5% is on the higher side, but it\u2019s not something totally unusual. It reflects a period when global markets and investments have been doing relatively well,\u201d he said.<\/p>\n
However, he noted EPF\u2019s portfolio is exposed to global economic conditions, interest rates, currency movements and market volatility.<\/p>\n
\u201cSo this range likely reflects a good phase in the investment cycle, not necessarily a new permanent level. Over time, it\u2019s more realistic to expect EPF dividends to move within a range of roughly 5.5% to 6.5%, depending on how the economy and markets perform,\u201d Liew said.<\/p>\n","protected":false},"excerpt":{"rendered":"PETALING JAYA: Economists broadly expect the Employees Provident Fund\u2019s (EPF) 2025 dividend to come in between 6.3% and…\n","protected":false},"author":2,"featured_media":491607,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[64,63,99,186,184,185],"class_list":{"0":"post-491606","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-au","9":"tag-australia","10":"tag-business","11":"tag-finance","12":"tag-personal-finance","13":"tag-personalfinance"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/491606","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=491606"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/491606\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/491607"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=491606"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=491606"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=491606"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}