What dividend rate can EPF members expect for 2016?

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EPF Members Can Expect a Realistic Dividend for 2016 Reflecting Market Conditions

EPF members can anticipate a realistic dividend payout for 2016, which will be aligned with the prevailing market conditions. While the exact rate has not been disclosed, it is understood that challenges in the equities market and low commodity prices are expected to influence dividend distributions. The Employees Provident Fund remains committed to its objective of delivering a real dividend that is at least two percentage points above the inflation rate, calculated over a three-year rolling period.
Impact of Market Performance on Dividends

The financial year 2016 presented a challenging investment environment, both domestically and globally. Factors such as capital outflows towards developed economies, currency fluctuations, and geopolitical events like Brexit and the US presidential election contributed to market volatility. This downturn was reflected in the performance of the benchmark FBM KLCI, which concluded 2016 with a three per cent decline compared to its end-2015 level, closing at 1,641.73 points. Furthermore, yields on Malaysian Government Securities increased across all tenors in 2016, indicating a decrease in bond prices.
Comparison with Other Funds' Payouts

The subdued market conditions in 2016 were also evident in the dividend and bonus announcements from other major Malaysian investment funds. Permodalan Nasional Bhd's Amanah Saham Nasional, for instance, announced an income distribution of 5.00 sen per unit for 2016, a reduction from the 6.10 sen distributed in the previous year. Similarly, Tabung Haji declared a bonus of 4.25 per cent, supplemented by an additional 1.5 per cent bonus for depositors who had not yet performed their haj. This contrasts with the 5.0 per cent bonus and an additional 3.0 per cent haj bonus announced for 2015.
EPF's Commitment to Real Dividend Growth

Despite the prevailing market headwinds, the EPF maintains its commitment to its long-term dividend target. This objective is to provide members with a real dividend that consistently exceeds the inflation rate by at least two per cent over a rolling three-year timeframe. For 2016, the inflation rate stood at 2.1 per cent, underscoring the fund's focus on ensuring that dividend payouts maintain their purchasing power for members.
Diversification as a Risk Mitigation Strategy

In navigating these challenging market conditions, the EPF has strategically diversified its investment portfolio beyond traditional asset classes. The fund has expanded its holdings into alternative investments, including private equity, real estate, and overseas investments. This diversification strategy is intended to reduce overall portfolio risk, especially given the volatility and uncertainty associated with traditional investment instruments. The EPF's prudent approach to investment, aligned with its risk appetite, aims to ensure financial stability and build confidence among its members.

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What dividend rate can EPF members expect for 2016?

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