KUALA LUMPUR (Feb 22): The Employees Provident Fund (EPF) declares 5.45% dividend for Simpanan Konvensional and 5.0% for Simpanan Shariah in 2019.

The 5.45% dividend for Simpanan Konvensional is indeed the lowest since 2008 when the provident fund declared 4.5%. Last year’s dividend was at 6.15% for Simpanan Konvensional and 5.9% for Simpanan Shariah.

The provident fund’s overall investment assets expanded to RM924.75 billion given a 2.8% growth in membership to 14.6 million.

“As anticipated, we saw substantially more volatility in 2019 as compared to 2018,” said Chief EPF Officer Alizakri Alias said in a statement this afternoon.

“Many issues in the global markets remained unresolved, but we also saw some new issues cropping up. There were three rate cuts made by the US Federal Reserve, the US-China trade spat escalated and continues to be unresolved, and there were uncertainties surrounding the Brexit negotiations. On top of this, we did not expect the Hong Kong protests to be prolonged and that certainly added pressure on an already fragile far-east market.”

“In addition, the domestic markets did not support the income-generating capabilities of the EPF as 70% of the fund’s assets are in Malaysia, with a major part of our assets in domestic equities,” he added.

Nonetheless, Alizakri pointed out that the fund’s Strategic Asset Allocation and decision-making structure provides a robust system that shields it from the storms.

“The EPF has always held that overseas holdings are an essential and important part of our overall portfolio, and have already announced on several occasions our intentions to continue these diversification efforts to reduce concentration risks,” he added.

Alizakri expects that 2020 is going to be “just as or even more challenging than 2019, with the full impact of the COVID-19 virus likely to drag down already soft global growth”.

“The US-China trade war still sees no signs of ending, among other risks to economic recovery. We hope that the domestic markets will be resilient, especially in light of the soon-to-be-announced government stimulus package which should help support investor and consumer sentiment,” said Alizakri.

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