Why Simpanan Shariah Got The Same As Simpanan Conventional?

EPF just declared 6.15% dividends for both Simpanan Konvensional and Simpanan Shariah, the second consecutive year both funds landed on the exact same number. Naturally, Malaysians are asking the obvious question: are the funds actually separate, or is one subsidising the other?

The short answer is no. Both portfolios are fully independent, managed under separate mandates with different investments. The matching rate is a coincidence of market conditions, not evidence of mixing. Here's how it actually works.

Two funds, same number — and everyone got suspicious

On 28 February 2026, EPF CEO Ahmad Zulqarnain Onn announced the FY2025 dividend at 6.15% for both savings categories, crediting a total of RM79.6 billion to members' accounts. Simpanan Konvensional received RM67.1 billion while Simpanan Shariah received RM12.5 billion, reflecting the different pool sizes of RM1,184 billion versus RM224 billion in assets, respectively.

In 2024, both funds also declared an identical 6.30%. Two years in a row at the same rate, down to two decimal places? You can understand why people raised eyebrows.

But the CEO addressed this directly. Ahmad Zulqarnain told reporters that the identical rates are "by coincidence", and that there could be a future year where Shariah comes out slightly higher.

Look at the historical data and the pattern becomes clear. From 2017 to 2022, Simpanan Shariah consistently delivered 0.25 to 0.60 percentage points less than Konvensional. In 2022 the gap was at its widest, 5.35% vs 4.75%. Then in 2023 it shrank to just 0.10 points. The convergence happened gradually, not overnight.

The full separation that changed everything

The turning point was Budget 2023, which directed EPF to fully separate its Shariah and conventional investment portfolios. Effective 1 January 2024, each fund now operates under its own independent Strategic Asset Allocation (SAA), meaning different investment strategies, different asset mixes, and different pools of money.

Before this, both funds shared a single SAA framework: roughly 47% fixed income, 42% equities, 7% real estate and infrastructure, and 4% money market instruments. But even then, the income streams were already kept separate. EPF's own disclosure stated that Simpanan Shariah derives its income solely from its portion of the Shariah portfolio — conventional assets never flowed into Shariah dividends.

What the full separation did was give each fund the freedom to set its own allocation targets. Former CEO Amir Hamzah put it plainly: Shariah savings would have its own strategic asset allocation, different from conventional savings. And Deputy Finance Minister Ahmad Maslan confirmed that separation would give the Shariah scheme the freedom to invest, with the possibility of matching or even exceeding conventional returns.

Why the asset mix matters more than you think

Simpanan Shariah and Simpanan Konvensional don't invest in the same things, and this is by design.

Simpanan Shariah operates within a smaller investable universe as there are fewer available Shariah-compliant investment options globally compared to conventional ones. EPF notes that Shariah savings carry minimal investment exposure in the financial sector compared to conventional — most global banks and conventional financial institutions are excluded under Shariah screening.

The private equity landscape is even more constrained. This is why EPF launched the world's first Shariah Private Equity SMA fund in 2021, committing US$600 million across three managed accounts. They had to create the infrastructure themselves.

Because Shariah has fewer options in private markets, it naturally carries a higher allocation to public equities — listed stocks on global exchanges. Simpanan Konvensional, with its broader mandate, can spread more capital across private equity, conventional fixed income, and a wider range of real estate and infrastructure deals.

2025's market conditions happened to favour both

For FY2025, global public equities delivered another strong year. The S&P 500 returned +17.9% in USD terms, MSCI World gained +21.6%, and the MSCI World Islamic Index rose +20.2%, nearly matching its conventional counterpart. Third consecutive year of double-digit global equity gains.

The Malaysian market told a different story. The KLCI gained only 2.3% in 2025, a sharp drop from 2024's 12.9% rally. On top of that, the ringgit strengthened 10.1% against the US dollar, eating into the MYR value of EPF's overseas gains. These two factors explain why the dividend dipped from 6.30% to 6.15%.

But both funds felt these forces similarly. EPF's overall equity portfolio delivered a 7.9% return on investment, contributing RM50.7 billion. Fixed income added RM26.27 billion at a 4.3% ROI. Simpanan Shariah's higher public equity exposure benefited from strong global Shariah-compliant stock performance. Konvensional's broader diversification balanced out to a comparable return. Different roads, same destination — this year.

Shariah compliance is a legal framework

For members who chose Simpanan Shariah, the integrity of the fund matters. EPF doesn't just slap a Shariah label on its investments. The fund operates under Section 43B of the EPF Act 1991, which mandates the establishment of a Shariah Advisory Committee (SAC) whose advice is legally binding on both the EPF Board and Investment Panel.

The screening process is rigorous. Domestic listed equities are screened based on the Securities Commission Malaysia's SAC periodic review. Global equities follow recognised Shariah index providers. Private equity, real estate, and infrastructure investments undergo annual screening based on the SAC's own criteria, and any asset that falls off the compliant list gets reclassified and removed from the Shariah portfolio.

The entire arrangement is structured under Akad Wakalah — where members appoint the EPF Board as their representative to manage savings according to Shariah principles. Every ringgit in your Simpanan Shariah account is invested within this framework.

This won't happen every year, and that's fine

The CEO was clear: identical dividends are not the new normal. The structural differences between the two funds mean that returns will naturally diverge in some years. There will be years when Konvensional edges ahead because private markets deliver outsized gains. There may be years when Shariah outperforms because global tech stocks — most of which are Shariah-compliant — go on a run.

What matters is the long-term trajectory. EPF has built both portfolios with a long-term view of delivering a similar rate of return. The five-year average for Konvensional sits at 5.88%, while Shariah is at 5.65% — and that gap is closing. The 2025 rate of 6.15% comfortably exceeds both averages.

For Malaysia's 18.1 million EPF members, the RM79.6 billion total payout represents real money compounding toward retirement. Whether you're in Simpanan Shariah or Konvensional, the fund is working.

Growing beyond EPF with Shariah-compliant investing

EPF is the foundation of retirement savings for most Malaysians, but it doesn't have to be the ceiling. If the 6.15% return has you thinking about how to grow your wealth further within a Shariah-compliant framework, there are options beyond your KWSP account.

Wahed offers halal investment portfolios that let you put your money to work according to Shariah principles — whether you're starting with RM100 or scaling up. Your EPF savings build the base; what you do beyond it shapes your financial future.