Modern portfolio theory helps explain why many people expect EPF Conv to perform better.

The theory essentially says that when PortfolioB (Shariah) is a strict subset of PortfolioA (conv), PortfolioA is generally expected to be able to perform better if constructed "properly". This is the before the fact expectation.

So yes, after the fact, such as for 2025 when the MAG7 / tech stocks are doing exceptionally well, PortfolioB can outperform.

I'll leave the phrase constructed "properly" open to readers' interpretation.
(if PortfolioB always outperform every year, the something interesting at the background)

The moment 2 epf portfolio exist there will be question when 1 outperform another.

Actually it's good moves...

So we can see which is which can perform & their investment strategies...

Shariah as we all know have very limited pool of investment to pick from... The fund manager need to mover with all the sources they have.... And with smaller size... It's little easier too...

Wonder what would happen if their tech investment boost up 2025 shariah's dividend to 10%, n conventional 6%.

Won't be so high till 10%

They would play with payout ratio.... & Keep some as reserve $$$ or expenses purpose....

But tech stock have gone up by double triple %.
How much reserves they want to keep? And if conventional epf contributors know this everyone will switch immediately to enjoy this reserve.

This post has been edited by MGM: Dec 21 2025, 11:06 AM

Anyone guess...
EPF don't really published their reserve $$$ publicly....

I think some already know that Shariah would outperform & have reserve moving forward.....

Matter of time only... Before take up rates picked up.... But many still in cross roads.... Because once you changed... No turned back to conventional types....

Also we don't know how long would this tech rally would be sustain.... If these all dropped (US market sometimes is crazy... Can spike or crash big percentage overnight or in weeks).... Highly liquidity & huge difference compared with local market....

If that is the case, mean there will be manipulation. Who to safeguard the ethic of manipulation is a question mark.

Are you under the impression they have 100% of their investment in a stock at went up by tripple %? That would be incredibly stupid of them.

Do not expect EPF to work like your personal investment portfolio. That is simply not the way this is built. You need to understand the purpose is steady returns over fluctuation.

You might also want to take into consieration the high chance of a significant stock value correction coming our way as soon as march 2026. Personally I have cashed out on more than 50% of my investments, securing rather obscene profit margins and now I can wait for a market correction to enter. My long term average planning is OK with just 5-6% pa. that is a realistic figure to me. But then again what do I know

Somehow I have the impression that EPF's overseas equity exposure is around 25 to 30% of total assets.

And like you mentioned, it would be pretty silly if all of that was ploughed into MAG7 / US tech stocks right at the start of the year. Since EPF Conv and EPF Shariah are basically managed by the same group of professionals, I think the more interesting and fair question is really about proportions: how much of the Shariah portfolio is tilted towards MAG7/tech, versus the non-Shariah side having exposure to things like banking stocks.

From Google’s AI, MAG7 is up about 25% ytd.
And Banking stocks are not doing too badly either. I just picked KBE as a proxy and that’s up 14%.

locally, Malaysian banks are a bit mixed but still okay lah. Eg:
RHB up ~27% (I am very surprised at this)
Maybank up ~9% thereabouts


So honestly, as long as the next 10 days are calm and kind, EPF is actually looking pretty good regardless of Conv or Shariah... Will shariah outperform? No point guessing until the result/announcement in feb/march.... cos still have reserve ratio to be determined by the FM.

(Just one small prayer… ringgit, please behave 🙏 Stay put now, and if you want to strengthen next year also can lah… lol)

For 2026, rate cuts is the theme.... headache...

This post has been edited by Wedchar2912: Dec 21 2025, 06:02 PM

Foreign investments is 35-40% of epf assets. Last quarter was 39%.

Thos ia consolidated number and I dont see the point speculation between shariah and conventional.

Yeah, not much value in speculating, which is why I didn’t zoom in on portfolio composition differences earlier.

That said, since you brought it up, there is a fair and nuanced point to be made here.

Earlier, I was refering to overseas equity exposure, but sure, lets use 40% for discussion purposes.

When we talk about overseas/foreign investments, it simply means assets located outside Malaysia.
From there:
EPF Conv can invest across the full universe, subject to its usual internal filters.
EPF Shariah starts with the same universe, but then applies an additional layer of Shariah screening.

All else being equal, if we use the US equity market (S&P) as a rough guide, tech-related stocks make up roughly about 50% of market cap.
While banking, which many people here instinctively label as “non-Shariah” is closer to 13%.
(source from google)

So if around 40% of EPF’s assets are overseas, the portion that Shariah would not invest in (mainly banking) is roughly that 13% slice, which then gets reallocated elsewhere. In big-picture terms, that works out to only about a 5% difference at the total portfolio level.

Could it be a bit more? Sure.
Could it be less? Also possible.
Realistically, we’re probably talking about a range of 3% to 8% of the overall portfolio — not a huge structural difference.

And it’s also worth keeping in mind that both EPF Conv and EPF Shariah are perfectly allowed to invest in MAG7/Tech stocks from a Shariah perspective. So a lot of the core growth drivers are actually shared.
EPF Shariah may not invest fully into MAG7/Tech stocks for the difference also...

In any retirement fund,the actual asset which is weighing on dividend returns is government bond portion which most retirement fund mandated to invest into...it continues to create demand for the bond and suppress the yield... allowing most government fund its national development plan while paying affordable interest on the bond

This is a stealth tax on most retirement fund. Actual retirement fund must continues to fight inflation thru investment into listed companies around like the Vanguard world fund, diversified geographically.

Fixed income can never overcome inflation in the long run

Remember it is 39% from the equities allocation of 45% for equity asset allocation hence the gains is not much because fixed income is already more than 55% with more than 95% is in MGS

SnP500 pure tech is only 34.6% 🤦‍♀️ but if include communication services tech and consumer discretionary tech is just slightly over 40% hence it is only 1/3 of that universe as of dec 2025

As long as financial and consumer cyclical is more than 20% unlikely tech would be more than 50% of weightage

This post has been edited by xander2k8: Dec 22 2025, 05:04 AM

Hi, wanna ask a bit on the Voluntary Contribution. Say I have deposited 50k earlier this year but withdrawn 30k after that, can I still deposit 80k before the year end or only 50k is allowed?

Also for the deposit, which one will be reflected faster - via KSWP website or via Maybank2u?

Thanks

This post has been edited by lowyat101: Today, 12:59 PM

its not based on net... the limit is based on gross contribution.

so you can only deposit 50K more for this year.

I used Maybank2u... good idea to allow 1 to 3 days to clear.

Great, thanks for the info.