PETALING JAYA: Although the Employees Provident Fund (EPF) has cautioned members to temper expectations for the second half of 2026, economists expect the retirement fund to deliver a dividend of around 6% for the year.
However, they said the final outcome would depend largely on global market and geopolitical conditions in the coming months.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the fund’s strong first-half performance provided a solid foundation for a respectable full-year return.
“It really depends on global market sentiment, which is likely to revolve around the reopening of the Straits of Hormuz, protectionist policies by the Trump administration, as well as the prospect of higher interest rates by the US Federal Reserve.
“I suppose a 6% dividend rate can be the baseline for 2026,” he added.
Sunway University economics professor Dr Yeah Kim Leng said the EPF had delivered an exemplary performance in the first half of 2026, underpinned by robust equity returns and strategic asset allocation.
“However, as the fund’s management has itself cautioned, the second-half outlook is clouded by heightened uncertainties,” he said.
Yeah said these included heightened geopolitical tensions in the Middle East and unpredictable US policy shifts, including potential tariff adjustments and changes in Federal Reserve interest rates which could trigger sharp volatility across global capital markets.
“Against this backdrop, a full-year dividend of between 5.5% and 6.0% will be commendable for 2026, assuming no severe market dislocation in the coming months,” he added.
The EPF recorded total investment income of RM57.5bil for the six months ended June 30, up 48% from RM38.92bil a year earlier.
For the second quarter alone, investment income rose 44% year-on-year to RM29.77bil from RM20.61bil, with equities remaining the biggest contributor.
EPF chief executive officer Ahmad Zulqarnain Onn said the fund had capitalised on strong global equity markets while maintaining a disciplined, long-term investment approach.
However, he remained cautious about the outlook for the second half of the year.
“Similar to the first quarter (1Q26), we continued to front-load income during the 2Q26 as market and geopolitical risks remain elevated.
“Our focus remains on delivering sustainable long-term returns, backed by a resilient portfolio,” he said.
