Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid singled out diligence and good research while Goh Lim Thye of Universiti Malaya cited astuteness as factors that led to the fund’s outstanding performance.
Afzanizam said EPF’s perseverance through rigorous investment processes and well-researched investment ideas have enabled them to spot the opportunities and invest the money in a timely fashion.
He said the purchasing power of EPF contributors has been “preserved” through a steadily increasing annual dividend rate that continually outpaces the sharp rise in the prices of goods and services.
“This means that their investment strategy is working despite having to contend with extreme volatility in the global and domestic markets,” he told FMT.
Goh said the EPF’s prudent risk management and active investment strategies had shielded the retirement fund from the pitfalls of financial downturns.
“Global markets have experienced inflation, interest rate hikes, and geopolitical tensions, yet EPF has delivered rising returns.
“This reflects the fund’s adaptability and capability to seize opportunities even in uncertain environments,” he said.
In 2024, Malaysia’s inflation rate was 1.8%, a decrease from 2.5% in 2023 and notably lower than the global inflation rate, which stood at 5.7% in 2024.
On March 1, EPF announced a dividend rate of 6.3% for conventional savings accounts for 2024, a significant increase from 5.50% for 2023 and 5.35% for 2022.
Chairman Zuki Ali said the higher dividend for 2024 was made possible by “recovering global and domestic markets, resilient economic growth, and sound portfolio management”.
He highlighted the importance of strategic asset allocation in maintaining a diversified portfolio that is also strong enough to overcome market volatility and support sustainable dividend payouts to its members.
EPF recorded a total investment income of RM74.46 billion in 2024, an 11% increase from RM66.99 billion in 2023. The equities asset class accounted for RM49.79 billion, or 67% of the total investment income, making it the largest contributor.
Higher consumer spending, stronger economic growth
Goh said the consistently high EPF dividend rate would lead to higher consumer spending, particularly among retirees who now rely solely on their savings to fund their expenses.
“When EPF pays higher dividends, contributors receive more money, boosting their wealth effect.
“Increased spending supports industries such as retail, real estate, tourism, and automotive — stimulating Malaysia’s domestic demand,” he said.
Additionally, Afzanizam has attributed a high dividend payout to Malaysia’s stellar economic performance, citing the nation’s GDP growth from 3.6% in 2023 to 5.1% in 2024.
“Given EPF’s sizeable exposure to the domestic market, its (profitable) investments have translated into higher dividend payments to its members,” he said.
Goh agreed, saying that a strong dividend rate could attract foreign investors, positioning Malaysia as a promising investment destination.
“A strong EPF dividend reflects the nation’s resilient economic performance, stable corporate earnings, and well-managed financial markets. This aligns with the strong GDP growth and positive investor sentiment in Malaysia,” he added.