(Kuala Lumpur, 1st) Economists believe that a weaker US dollar and a slight rise in the Malaysian stock market caused the Employees Provident Fund (EPF) dividend yield for 2025 to drop from 6.3% the previous year to 6.15%.
Nonetheless, according to MalaysiaKini’s report, economists see the EPF’s ability to achieve such a yield amid global market instability as encouraging.
Balkjoa from Malaysia University of Science and Technology (MUST) said that US dollar fluctuations have significantly reduced the EPF’s overall returns.
He analyzed that over 40% of the EPF’s investment portfolio is in overseas assets; although these investments generated strong returns, the weakening of the dollar reduced net profits.
“The ringgit’s exchange rate against the US dollar appreciated by about 10.1% in 2025, which also lowered the actual value of overseas earnings when converted back to ringgit.”
He pointed out that market gains on Bursa Malaysia were only about 2% in 2025, below the over 10% seen in 2024.
He said more than 36% of the EPF investment portfolio is invested in domestic stocks, and thus trading volume fluctuations also affected overall income.
“Although profits remain considerable, they fell short of expectations for 2024.”
Meanwhile, Professor Ye Jin Ling from Sunway University said that the EPF’s 6.15% dividend is very encouraging and consistent with the fund’s historical average dividend rate of about 6%.
“Compared with local and foreign pension funds, insurance funds, and other investments, it remains competitive.”
She pointed out that Malaysia’s average inflation rate for 2025 is 1.4%, meaning the EPF’s 6.15% dividend translates into an inflation-adjusted return of about 4.75%.
“Such a real return means contributors’ purchasing power is protected and will not be eroded by inflation.”
She said that while geopolitical tensions and armed conflicts have caused financial market volatility, the impact on returns was not as severe as expected.
“Despite ongoing global conflicts, the Employees Provident Fund (EPF) still managed to avoid any negative returns.”