Contributors to the Employees Provident Fund (EPF) may have cause to celebrate this year. According to reporting by Free Malaysia Today (FMT), sources have notified FMT Business that higher dividends of up to 5.6% are on the cards; in part due to the good performance of the fund’s overseas investments.
The sources also stated that the EPF is due to make an announcement before the end of the week. Said announcement is expected to reveal that contributors can expect to see a dividend of 5.4% to 5.6% for conventional savings, up from the 5.35% declared for 2022.
Contributors with shariah accounts are also likely to see an increase of dividends of 4.9% to 5.1%, up from 4.75% from the previous year.
It was also noted that while there was a dip in earnings last quarter and relatively poor domestic equities performance, the solid performance of offshore investments have helped to make up for it.
Not all good news
On the other hand, reporting by the New Straits Times (NST) has been less optimistic. According to the Business Times, the global economic slowdown and market uncertainty, especially in the final quarter of 2023 may have had a large impact on EPF performance.
A combination of global economic trends such as inflation and interest rates as well as geopolitical events can significantly influence the EPF’s investment returns.
“These global trends influence exchange rates, foreign investment flows as well as Malaysia’s import-export dynamics which ultimately affect EPF’s portfolio investment returns domestically and internationally,” UCSI University Malaysia associate professor of finance and research fellow at the Centre for Market Education Liew Chee Yoong told the Business Times.
One example that Liew cited that could affect the EPF’s performance is the economic slowdown in developed nations. The slowdown had influenced the returns of EPF’s investments abroad, interest rate volatility as well as its foreign portfolio performance, he added.
