KUALA LUMPUR: The Employees Provident Fund (EPF) is on track to deliver a stronger dividend for 2025 following its robust performance in the first nine months of the year, according to economists.
The EPF's dividend payout for 2024 stood at 6.30 per cent for both Simpanan Konvensional and Simpanan Shariah, with a total payout of RM73.24 billion.
The EPF's investment income rose 27 per cent per cent to RM25.07 billion for the third quarter (Q3) ended Sept 30, 2025 from RM19.67 billion a year earlier.
This lifted total investment income for the January-September period to RM63.99 billion, up 11 per cent from RM57.57 billion in the same period last year.
Of the RM25.07 billion, RM20.48 billion came from Simpanan Konvensional and RM4.59 billion from Simpanan Shariah. Total investment assets stood at RM1.37 trillion, a 12 per cent year-on-year increase.
As at end-September, the fund's total investment assets stood at RM1.37 trillion, representing a 12 per cent year-on-year growth.
The EPF chief executive officer Ahmad Zulqarnain Onn said the growth reflects the execution of its strategic asset allocation.
Ahmad Zulqarnain said the fund is encouraged by the strength of the Malaysian economy, which supports 61 per cent of its portfolio, while simultaneously pursuing a global investment strategy that generated 53 per cent of total investment income this quarter.
"While the nine-month performance has been encouraging, we are cautious heading into the fourth quarter.
"The rally in global equity markets has elevated valuations, while mixed signals from global economic indicators may temper the pace of interest rate reductions," he said in a statement.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the double-digit growth suggests EPF is well-positioned to deliver a "respectable dividend", but risks remain.
"One key risk is the valuation in AI-related stocks, where a price correction could weigh on global investment performance. Another is the timing of the US Federal Reserve's anticipated interest rate cut in December.
"So, Q4 will be crucial in determining the dividend rate that can be announced next year," he told Business Times.
Afzanizam added that the results underscore the effectiveness of EPF's diversified investment strategy across multiple asset classes and geographical exposure.
"It clearly shows that the EPF investment strategy, especially their diversification into various asset classes and geographical exposure, has allowed the fund to ride market uncertainties effectively," he said.
Afzanizam said such performance requires "skill and discipline", noting that the market shock in early April following the Liberation Day developments could have easily shifted risk sentiment towards more defensive positioning.
"Timing and quality of investment decisions do matter in determining the value of investment. It indicates that EPF is well advised by its investment research team and fund managers, who are highly skilful and experienced," he said.
Economist Dr Geoffrey Williams said the EPF performance continues to be strongly supported by global markets.
"EPF already said 53 per cent of its third-quarter performance came from global market gains. This income is already built in and can be consolidated," he said.
He noted that although global markets could slow in the fourth quarter, the gains accumulated so far place EPF in a favourable position for the year.
"There are always risks in global markets, but EPF is good at managing these risks, and global markets have provided the best returns so far.
"Given that 53 per cent of income came from global markets, it is clear that freeing EPF from constraints that restrict it to low-performing domestic investments would give a better overall return for EPF members," he said.
Despite this, it looks like there could be a higher dividend for 2025 compared to last year, Williams added.