Strongest returns since 2017 as EPF declares 6.3% dividend
SHAH ALAM: The Employees Provident Fund (EPF) has beaten expectations by declaring a 6.3% dividend for both conventional and syariah accounts in 2024 – its highest since 2017.
The total payout for conventional savings amounted to RM63.05bil while for syariah, it was RM10.19bil – bringing the total dividend payout for both accounts to RM73.24bil.
For 2023, EPF declared a dividend rate of 5.5% for conventional savings with a total payout amounting to RM50.3bil as well as a 5.4% dividend for syariah savings, with a payout of RM7.5bil.
For 2024, EPF’s total investment income grew 11% to RM74.46bil, from the RM66.99bil reported in the previous year.
Driven by portfolio income and net contributions of RM108.22bil, the retirement fund’s investment assets grew 10% to RM1.249 trillion, from RM1.135 trillion in 2023.
As at December 2024, 63% of EPF’s investment assets were invested domestically.
Domestic investments generated 49.7% of total investment income, at RM37.02bil – thus providing stability to the overall total investment income.
Meanwhile, RM37.44bil or 50.3% of the total investment income recorded came from global assets. A total of RM63.59bil of the RM74.46bil investment income was generated for conventional savings, with RM10.87bil for syariah savings.
As for asset classes, equities contributed RM49.79bil after netting off write-downs. This asset class accounted for 67% of EPF’s total investment income, generating a return on investment (ROI) of 9.90%.
EPF attributed the rise in income for this asset class, which surpassed the RM39.01bil recorded in 2023, to the strategic and agile approach in capitalising on gains during periods of market volatility, coupled with robust performance across equity markets.
In 2024, write-downs for listed equities amounted to RM720mil.
Private equity investments, which represented close to 10% of the equity investments, generated an ROI of 11.33%.
Fixed income instruments continued to maintain steady returns and mitigated the impact of short-term market volatility.
This asset class, comprising predominantly Malaysian government securities, contributed RM21.91bil, or 29% of EPF’s total investment income for 2024, generating an ROI of 4.27%. The higher income recorded compared to 2023’s figure of RM19.74bil was also in line with the growing asset size.
Real estate and infrastructure registered an income of RM1.64bil, recording an ROI of 5.13% on a constant currency basis.
Income from money market instruments was RM1.12bil, delivering an ROI of 1.89%. As a majority of these investments were denominated in non-ringgit currencies, overall performance was impacted by foreign exchange translation during the year as the ringgit strengthened against the US dollar.
Fixed income instruments made up for 46.2% of investment assets, followed by equities comprising 43.5%. Real estate and infrastructure as well as money market instruments made up for 6.3% and 4% of EPF assets respectively.
EPF chief executive officer Ahmad Zulqarnain Onn said the fund’s future investments will be guided by its strategic asset allocation (SAA) for the years 2025 up to 2027.
The SAA is reviewed every three years.
He added that the current balance between domestic and global investments will be maintained.
“There will be no change, no reduction. The aim is to keep it stable over the next three years.
“In mathematical terms, this means that 70% to 80% of new money (contributions from foreign workers) will be deployed domestically. The risk profiles of domestic and global investments are quite different,” he said at a press conference following the EPF 2024 dividend briefing here yesterday.
He also said the funds coming in from foreign workers’ contribution are expected to not exceed RM5bil in the first year, based on the 2% contribution rate from employers and 2% share from employees.
He said this in response to a question on how foreign workers’ contributions would be invested.
As for the outlook for 2025, Ahmad Zulqarnain said the focus would be on trends with multi-year tailwinds, including healthcare, artificial intelligence (AI) and data, energy, and private markets.
With a fund size of US$247bil (RM1.1 trillion), EPF also ranked as the 13th largest pension fund in the world and the fifth largest in Asia as at September 2024.
EPF had 16.22 million members as at end of last year with 8.78 million active contributors.
Total contributions in 2024 rose 11% to RM108.22bil, reflecting an increase in the number of members, wage growth and sustained trust in EPF.
