Consequently, investments in MGS during that era were able to produce very high returns for the EPF, making it possible for the Fund to declare its highest dividend rates. However, the high interest rate regime also meant that cost of housing loans and hire purchase were considerably higher at that time than they are now.
|2.||Why are other savings funds in Malaysia able to offer better dividends than the EPF?|
The simplest explanation is that other funds have different investments objectives. The EPF maintains an asset allocation structure that does not expose our investments to high risk in line with our role as a retirement fund.
Other funds are also much smaller in size compared to the EPF which stands at RM340 billion today. Smaller funds are easier to manage and more maneuverable in terms of reshuffling asset allocation and selling off shares.
Therefore, it is consistent with the "Interest And You" posted earlier this month.
If you hope the EPF dividend will be higher... then you are also expecting to pay MORE interest for house loan, car loan or business loan.