EPF did announce its income quarter to quarter, so far we have already known 3 quarter result, 4th quarter result likely won't be too far off. So its income number give analysts or even ordinary people can guess within range of guess of 5.0-6.x%.

Just added known 1st, 2nd, 3rd, and estimate on 4th, then divided by AUM, roughly can guess within range probably dividend rate of 2023.

Bulk of income come from steady bond interest and stock dividend, which are highly predictable and expectable.
Stock market trading performance is like icing on the cake.

The difference :
Tell you to put money in EPF, no commission.
Tell you to buy unit trust, agent got commission.

EPF uses our money to invest in bond and stock market
Unit trust also uses our money to invest in bond and stock market.

EPF money is not belonged to gov.
Our EPF contribution belonged to ours in EPF account, similar to our bank account.

EPF is pension fund, and contributors' capital is guaranteed.
Your investment fund can make a loss and you bare the entire loss.
So EPF is not as same as normal unit trust out there.

Investment, you do not know when is good time or bad time.
There are some trust fund making losses and not able to recover even after many years, imagine that happened to your life time saving pension fund when you approaching retirement and want to withdraw it, surely you may not happy about it if your pension fund amount shrinking.

So as pension fund, EPF needs to work conservative way of investment, also diversified into many like bond and many safer and yield lesser compared a pure equities fund.

In fact, if look back, although EPF may be a single digit return investment, in term of investment return, it does beat many unit trust out there.

Another point is that, EPF has trillion worth to manage, it can much more difficult to generate return compared to a 100 million trust fund.

Q1 - 15.16 B
Q2 - 18.03 B
Q3 - 14.67 B
Q4 - ?

We can see, EPF income is quite steady, due to its investment portfolio consist of bond and equities mixture and dividend collection from its investment besides some outsourced investment.

6.5% is too far stretch to start with

Total 3Q = 47.86B
With EPF fund is now more than a trillion, to achieve 6.5%, Q4 needs to register more than 20B.
If using average, the more achievable realistic figure is about 5.5% to 6%.

4Q equities investment likely to be better, as Bursa has better performance since the end of 3Q 2023.
3Q 2023 was the low point of many stock markets, also bond price.

So personally predict 4Q should be better than 3Q.
If 4Q come out in the range of 15 to 18, it gives the range of total income 62 to 65B, divided to a trillion plus total fund, I would say, high likelyhood is in the upper range between 5.5 to 6.

The concept is same for reit.
Reit only can give out dividend based on realised gain and income.

Paper gain merely on paper, until the gain is realised, money is not yet pocketed.
Paper gain also can shrink back, if share price or valued of unrealised of an investment turn south.

You cannot give out real hard cash dividend on something not yet in the pocket, right?

Accounting term, they use realised gain or income instead of profit has a reason.

This post has been edited by newtunes: Mar 3 2024, 04:12 PM

1. I have see many withdraw and with sudden splash of free cash, either spent it, make wrong investment decision or fall into quick rich scheme.
So also must becareful. A year or two ago, my aunties invested into one unit trust that invested globally, me also think wise move as diversification as some forumers here.
The unit trust portfolio consist of microsoft and Nvidia also, until now, still losing about 5%, last year even worst nearly -25%. Even though the unit trust has Nvidia in its 5 top portolio, but unit trust has a mandate to diversify its portfolio, cannot be investing all its fund into one stock.
The Nvidia performance alone pull up the unit trust from -25% to -5% while drag down by others.

Many said US market new high, should make profit, but actual, Nasdaq, S&P new high are pulled up by magnificent Nvidia and Microsoft, other stocks actually so so only, Russelll 2000 only gain less than 5% this year. While Nvidia alone shoot up from 100+ to 850 now.

So look back 2 years, for her, may be she better off by putting the money in EPF.
2 year EPF +11%, her unit trust -5%.

We do not know when next stock market crash or any crisis happen. But we know when we will retire.
So EPF is still an important to have, I agree with diversification, but EPF still is an important role in retirement planning.

After wishness how FTX fall, Credit Suisee ATI bond default, and a little far behind, Lehman, I realised we should not take for granted investment is easy.

Personally don't recommend people spent entire EPF or entire retirement fund saving just to send kids to overseas.

If the kid is smart, they are lot of scholarship and loan program available nowadays, may not need your million EPF to study overseas.

If the kid is ordinary, spending million just to send kid overseas and end up no saving and risking your retirement is too much.
The ROI may not worthwhile.
There are other more economical avenue for kids education, not necessary must spend million to send kid to overseas.
Also, by spending entire retirement fund, then your may also need to rely on your kids to support your finance in the old age and burden them financially.

We are not in 80s anymore, whereby a degree is scarce and crucial to open up your career.
Today, degree is everywhere and crucial important factor for career success are skills, ability to adapt, thrive in fast changing world.

In 80's tertiary is scarce, overseas was like sole avenue if not managed get into local U, but today, it is not, coupled with internet age, the situation is not the same anymore.

Unless the kid is going top notch university one, then different story, but as said, if the kid is able to enter those top notch, then scholarship should be available. Coupled we have many study loan available, so not necessary for parent to risk entire retirement fund for their education.

Having own retirement fund, is also a responsibility act towards your kid, so that you do not burden them in the future.

CPI number doesn't lie, it is personal inflation that result people feel inflation is higher than the number because they are buying more than previously, that resulted money not enough, by then convenience claim it was inflation.
Today, people eager to own more things than previous.
Last time, you just want a handphone.
Now you want a handphone, an ipad, a iwatch.

CPI doesn't lie, because it is a basket of goods, and there are items that have little inflation, typically electronic gadget.
Let say CPI consist of PC price, mee goreng price and sugar price. Over than last 20 years.

A PC cost 3k 20 years back then, still cost 3k today, 0%.
Mee goreng from 2.00 to 6.00 - 200%
Sugar price from 1.50 to 3.00 - 100%.

Total basket up 300% over 20years for 3 items, CPI = 5% inflation.
But most people only see mee goreng up 200%.20 years = 10% inflation.

Actually if one cook at home, the feel on inflation is not as severe as many claims. It is eating outside inflation, and housing inflation are more pronounced, others are more like in tandem of CPI number.

To me, if dividend rate > CPI number, it is deemed job done on giving me real return. If I want more return to beat personal inflation, then I need to venture into other.
EPF is called retirement fund, the purpose is not to chase high return, while exposing more risk on possible losses.
Because EPF guanratees our principal and with consistently dividend rate, need to payout on time when we retired in, disregard how stock market outside, so exposure of such a retirement fund definitely cannot be that same with ordinary investment fund, UT, or individual stock price.

If look the other way, the account 3 if being given lesser rate or equivalent like bank low saving rate, it may benefit for those intend to concentrate on account 1&2, as EPF doesn't need to give too much return on those 10% account 3 fund, so more towards account1&2.

If rate is same for Ac3, then no need to have a feature of transferring from Ac3 to Ac1/2

You cannot transfer all ac2 to ac3.

Since Ac3 has the same rate, it is needless to do the transfer at the moment.
Wait for (if) there is a change of Ac3 rate in the future, only then there is a need to transfer.

To be fair, they are dealing with millions of members, if every member want different ratio, then it is really a mess and troublesome to manually adjust one by one.
So by default, all the same see sensible.

I don't see there is a big deal on it on the Ac3 issue, since it is only 10% of month contribution, amount won't be too big for most.
Just treat it as emergency fund.

ETF can be good choice to diversify to improve the return of retirement fund.
But it will never able to replace EPF that provides safety net on principal and consistent positive return rate.

Imagine your entire retirement fund that you accumulated for the last 30 years, put in ETF or whatever suddenly down 30% when you retired.
When bear market hit, then we will see the importance of EPF like fund as retirement safety net.

Nasdaq took almost 18 years to recover back its previous high during 1999.
While when we retired, we may not have 18 years to wait for.

EPF still serve a very important retirement planning, even though other investment tool can or may provide better return. Also, there is no guarantee those other tool may able to gain, may as well losses.

Extra fund - take risk to maximise return.
But for retirement fund, it is different strategy.

Also the ability to withstand the risk also depended on age.
For those near retirement, the risk should be lesser, as we don't know whether we have another15 or 18 years to wait or not.
Also the emotionally being affected by market crashed. Imagine 30 years of hard saving halved due to market crashed, even though it may rise in much long term future.

Retirement money is not the same with ordinary saved money in the planning.

If withdrawal can be done online, transfer between ac should be able to do.

The ac3 has not even yet started, give some times to them to tweak the programming online.

Don't need to be too anxious.
After all, interest already being said to be the same across ac for time being.

That's true, it does beat many investment product, saving instruments, although is is not a top notch return.
The most important is capital guaranteed. Only when market crash, then will see how valuable the feature capital guaranteed. We are talking on retirement fund, that may not able to see the recovery in much more longer term.
When market bullish time, everyone look down on 6% return. But when market crash 30%, then capital guaranteed with stable 6% seems like gold.

Not everyone can spot good and right investment product, remembered Lehman bond issue, ATI bonds, current US commercial real estate, reit slump.
Overseas investment is not all rosy, there are risk here and there.

It is good to diversify, but EPF is still a good and important part of retirement planning,

Stop worrying too much about 30 or 40 years later.
We work and save as much as, and hope of good return on our saving.
Who's know what will happen 20 or 30 years later on.

Everyone knows money get smaller over the time due to inflation, doesn't means we shouldn't save money for future.

There is no magic formula or certain way to beat inflation.

Some said investment can, but if invest wrongly, not only cannot beat inflation, but losing the capital as well, worst than FD and EPF. Have seen many cases, and experienced by my ownself as well.

There is no way to maximise return.
Trying to maximise return is like trying to sell share at highest point, and buy at lowest point, which we know it is impossible and something we can't control.

The message is : stop worrying something that we can't control.

Just work hard, save enough, allocate and diversify asset and hoping return can out beat the inflation.
Needless to count how much 1 mil will be worth after 30 years. Worrying too much, bad for health. Bad health, more money needs for retirement to pay for medical bill.

Life is short, needless to count too far away especially something 30 years down the road. Who's know future economy become deflation, just like what happened on Japan lost decades economy.

Investment income more 10% compared to previous year quarter, it doesn't say total investment made 10%.
Example
Your have 100, last year you made 5 buck, this year you earn 5.5, 10% more.
It is not you made 100 x 10% = 10