WITH a storm brewing on the macro front due to US President Donald Trump’s tariffs and trade restrictions, the Employees Provident Fund (EPF) will continue to seek shelter in the domestic market.  This raises questions whether the fund can match or beat the latest dividend returns of 6.3%, in 2025. It is the highest payout since 2017.  The fund appears confident of its strategic asset allocation (SAA).

“The EPF will continue to be guided by its SAA, which targets optimal returns within our risk tolerance as a long-term retirement fund,” it says in a reply to StarBiz 7.  “The SAA is reviewed periodically to take into account the latest capital market assumptions and the asset-liability profile of the EPF, which includes the growing asset size,” it adds.

Under the present SAA, the provident fund has 46% of its assets in fixed income and 44% in equities. The 44% in equities includes 4% in private equity. In addition to these investments, it has 6% in real estate and infrastructure, as well as 4% in money market investments. There is merit to the domestic angle in 2025, according to fund managers.

“The EPF’s strategic allocation of 1:2 offshore:domestic may work well under the general market outlook. Given a relatively good 2024, a tactical allocation in 2025 for risk management may be a wise move. This is especially so with market uncertainty under Trump 2.0.

Read the full article HERE.
Originally published by The Star.