Malaysia's Employees Provident Fund announced a 2018 dividend payout of 6.15%, to be credited to the accounts of more than 12 million workers in the national system's main retirement account, down from 6.9% in 2017.
The EPF portfolio ended the latest calendar year valued at 833.8 billion ringgit ($204.2 billion), down just less than 1% from the prior quarter but up 2.9% from the prior year.
Gross investment income for the year came to 50.9 billion ringgit, down from 53.1 billion ringgit the year before.
EPF Chairman Samsudin Osman, in a Feb. 16 news release, said despite a challenging year marked by four hikes in U.S. interest rates and a spike in U.S.-China trade tensions, the EPF – with a 3.9% real dividend payout for the rolling three-year period ended Dec. 31, 2018 – was able to comfortably clear its 2% real return target.
Mr. Samsudin said that success was partly attributable to the diversification of the EPF portfolio. As of Dec. 31, 26.7% of the portfolio was invested in overseas assets, down from 28% at the end of 2017, even as the dollar appreciated over the year to more than 4.13 ringgit from 4.06 ringgit. Overseas holdings contributed 37.5% of gross investment income for the year.
At the close of the latest year, 50% of the EPF's portfolio was in fixed income instruments, followed by 39% in equities, 6% in money market instruments and 5% in real estate and infrastructure.
At the close of 2017, roughly half of the portfolio was in fixed income, with 42% in equities and 4% apiece in money market instruments and alternative segments such as real estate and infrastructure.
Mr. Samsudin predicted continued volatility in global markets, amid the impending deadline for the U.K.'s exit from the European Union, slowing global growth and further U.S. interest rate hikes. He said the EPF's long-term global diversification plans will "equip us with the ability to withstand short-term volatilities."