Curious about how to make sense of EPF’s 6.3% dividend yield? How did returns of other common investment vehicles stack up against EPF’s in 2024?
Money is in! The Employee Provident Fund (EPF) recently announced a 6.3% dividend yield for 2024; everyone is talking about it. Both of EPF’s conventional and Shariah funds registered the same yield.
But what does 6.3% mean for you? How does it measure up to other investment choices?
There is a saying that comparison is the thief of all joy. But in the case of investments, having all the facts – in this case, the returns of other investments – could provide the proper context to EPF’s 6.3%, and steer your future choices!
Contents
Important Notes Before We Continue
The information provided in this article are mainly to provide facts and context for some common Malaysian investment vehicles in regards to EPF, using data from 2024.
This article should not be considered financial or investment advice. Instead, use the data to make your own informed decisions.
EPF helps Malaysians retire. And they do so by taking retirement funds contributed every month by Malaysians to invest in various investments in Malaysia and the world. How EPF invests is different from the other investments out there in terms of goals and risks. Hence, most of the investments here are not apple-to-apple comparisons, and shouldn’t be considered as such.
Comparison #1: Fixed Deposits (FD)
Fixed deposit is one of the most common investment by Malaysians. You put a sum of money into a fixed deposit bank account, and the bank promises to give you a return after a period of time.
The bank does that by taking your deposit and lending out the money as loan. The loan normally has an interest rate that is higher than the fixed deposit rate – this is called the spread.
In 2024, investing in FD generated 2.8% profit for Malaysians. While EPF’s dividend yield exceeded that, fixed deposits can be considered one of the safest investments to take on. The banks typically guarantee the returns on fixed deposits to encourage Malaysians to deposit money.
Comparison #2: Amanah Saham Nasional
Amanah Saham Nasional or ASNB is also considered a common choice for many Malaysian investors. It is managed by Permodalan Nasional Berhad (PNB), a government-owned investment firm. And it has more than RM347 billion in assets.
ASNB takes the fund and invests primarily in the stock and bond markets. The returns and dividends from there are then given to ASNB investors. Competition to buy the funds is stiff though as ASNB is backed by the government.
The dividend of 5.75% in 2024 is the highest in the past 6 years. The key main difference here is that you can sell and withdraw your funds from ASNB without much difficulties while withdrawing from EPF is less flexible.
Comparison #3: Robo-Advisors
Robo-advisors have become more prevalent in Malaysia, especially among the younger generations. They are easy to understand as investors only need to specify what kind of risk and return preference. The robo-advisors will automatically allocate the funds accordingly with their own in-house algorithm.
They are similar to mutual and unit trust funds, where they invest the money you deposit into various investments that matches your preferences.
In 2024, the various robo-advisors in Malaysia yielded an average of 5.2%. However, the range of returns are wide, ranging from 3.4% to 16.7% depending on how risky the different robo-advisor funds are.
Comparison #4: Private Retirement Schemes
Private Retirement Schemes or PRS funds are touted as alternatives to EPF. Even EPF outsources some of its funds to PRS under this list for 2024 and 2025. They provide investors with alternative funds to help with their retirement goals.
You can choose to invest in PRS funds that matches your risk preferences, whereas you are not provided choices when investing with EPF. According to data from the Private Pension Administrator (PPA), PRS funds’ returns from February 2024 to January 2025 ranged from -12.8% to 15.0%.
Comparison #5: Mutual / Unit Trust Funds
Mutual and unit trust funds differ from PRS funds, in that they are more geared towards all kinds of investors with different financial goals. They take in money from investors, and invest them according to the fund’s objectives and investment strategies. Every fund will be different.
According to Securities Commission (SC), there are more than 775 funds in Malaysia. It is very hard to compute the total returns for all the funds.
Our best way to do this is to compute the highest and the lowest fund returns in a one-year span. According to eunitrust, the top performing fund generated 57.5%, and the worst one lost 22.8% from 6 March 2024 to 6 March 2025 (best data point that we can find).
Comparison #6: Stock Markets in Malaysia, US, and China
You can invest in the stock market indexes around the world such as FBMKLCI, S&P 500, and Shanghai Composite Index through exchange-traded funds (ETF). They are slightly different from mutual funds, as the funds are designed to mimic the indexes.
In 2024, among the three Malaysian, US and China markets, the S&P 500 generated the highest return at 23.3% followed by FBMKLCI (12.9%) and Shanghai Composite Index (12.7%).
The US market did well because of the craze over AI stocks such as Nvidia. On the other hand, the Malaysian market went higher because of the construction, utilities and property stocks. Lastly, China’s market was good too as the government promised to do whatever it takes to get the economy going.
Comparison #7 : Property
Many Malaysians invest in property because they are a sign of stability and you can see and touch it (unlike all of the investments here). In 2024, house prices in Malaysia rose by 3.3% (NAPIC) while we estimated that rental yield was 4.9% (RM23,940 annual rent divided by house price of RM486,678, IQI Global).
If you outright own the property and have a tenant, you are expected to generate about 8.2% return (if no tenant, 3.3%) on your house. As most Malaysians take on loans to purchase the property, that 8.2% return will have to take into account the interest rate you are paying on your loan, which comes up to about 5.1% as of December 2024 (DataGov).
Hence, after subtracting, it will come up to 3.1% return on property investments.
Summary
| Type of Investments | Return (2024) | Source |
|---|---|---|
| EPF | 6.3 | EPF |
| Fixed Deposits | 2.8 | Data.gov |
| Amanah Saham Nasional | 5.8 | ASNB |
| Robo-Advisors | 5.2 | Various |
| Private Retirement Schemes | -12.8 to 15.0 (depending on fund) | PPA |
| Mutual / Unit Trust Funds | -22.8 to 57.5 (depending on fund) | eunittrust |
| Stock Markets | ||
| - Malaysia (FBMKLCI) | 23.3 | investing.com |
| - United States (S&P 500) | 12.9 | investing.com |
| - China (Shanghai Composite) | 12.7 | investing.com |
| Property | 3.1 to 8.2 (depending on whether you are still paying the loan or have a tenant) | NAPIC, IQI Global |
Having a comprehensive dataset to compare returns against EPF is a good starting point to think about your investing strategy as Malaysians have plenty of choices when it comes to where to grow our money. However, it is important to know that not all investments are created equal. They have their own characteristics, risks and pros and cons to think about.
Do your research and decide for yourself what is best for your current situation and the goals you intend to achieve. If you are feeling lost, consider engaging a licensed financial planner to help create a personalized plan that best suits your needs.
Let us know in the comments below what you think about the 6.3% EPF dividends!
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