Reasons For Low EPF Dividend
EPF dividend declared had been always a hot topic to discuss each years. Most of the people complain that the dividend given is too low. Most investor can get higher than it or roughly 8 to 10 percent by investing it in unit trust. More aggressive investor that tend to invest in stock market sometimes will gain more than 20%.
I purposely bold the word for sometimes. Yes, only sometimes they can get such outperform result. They might have negative return or lower than 4% result last year. In other words, their return are inconsistent. However, EPF return are more consistent from the past year result. Below are their dividend declared from year 2001 to 2008.
| Years | Dividend |
| 2001 | 5 |
| 2002 | 4.25 |
| 2003 | 4.5 |
| 2004 | 4.75 |
| 2005 | 5 |
| 2006 | 5.15 |
| 2007 | 5.8 |
| 2008 | 4.5 |
| 2009 | ? |
On 30 September 2009, EPF have their portfolio 68% in bond and government securities, 26% in stock market and remaining 6% in money market & property. Their portfolio is very conservative as you can see they have 70% in bond which have low risk. High risk, high return; low risk, low return.
Bond and money market investment risk are too low or maybe negligible. Would you worry your bond or fixed deposits? Definitely not. EPF manage our retirement fund carefully. They cannot simply put our money in gamble. Therefore, their portfolio have lower percentage in stock market.
In 2009, investor might gain impressive return from stock market due to the market rebounding. Most investor will have double digit return this year. As you can see the EPF portfolio only consist 10% of stock market. Therefore, I guess it would have not much impact on EPF profit until dividend declared more than 10%. 6-8 percentage will be consider good for me.
