Saturday, January 26, 2008

EPF 5.8% Dividend

EPF has recently announced that the dividend for 2007 is 5.8%. Is that good? That's one of the best dividend in recent years. If we compare back to when we were a more under-developed nation, then this dividend is actually quite low.

Should we be satisfied by this dividend? Does it give us good returns? EPF guarantees a return of 2.5%, irrespective of market condition. That essentially helps us weather through inflation.

So now, we have seen that EPF has invested less than 1% of its portfolio abroad. Is it a wise investment? Should it be more? Should it actually follow the footstep of GIC and Temasek of Singapore, which took up stake at Citibank, UBS and Merrill Lynch. Should EPF bought up a similar size stake at JP Morgan or Morgan Stanley? Would we want to take a dip at such an investment?

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