KUALA LUMPUR: Kumpulan Wang Persaraan (Diperbadankan) (KWAP) registered gross income of RM9.03 billion in 2017, the highest since its inception in 2007, thanks to higher investment income.
KWAP’s gross income in 2016 was RM6.36 billion.
The 42 per cent increase in gross income was on the back of improved gross return on investment (ROI) to 5.77 per cent in 2017 compared with 5.35 per cent in 2016.
Last year, KWAP's total fund grew to RM140.80 billion from RM125 billion in 2016.
“Our fund size of RM140.80 billion reflects a staggering growth of 235.72 per cent in the short span of a decade,” KWAP chief executive officer Datuk Wan Kamaruzaman Wan Ahmad said at a media briefing here.
KWAP is the second largest pension fund in the country after the Employees Provident Fund.
Wan Kamaruzaman said the KWAP board has set a conservative target for his team to expand assets by more than 5 per cent to reach RM150 billion at the end of this year.
Wan Kamaruzaman said KWAP would review its Strategic Asset Allocation (SAA) for this year, which will in turn, see the fund adopting the total return approach from focusing on return on investment previously.
This will allow KWAP to streamline investment mandates and allow portfolio managers to execute more structured strategies and enhance portfolio returns.
“Our asset allocation comprised 54 per cent fixed income, equity (36 per cent) and 10 per cent on alternative investment. But, now, we are working on a 46 per cent fixed income, 40 per cent in equity and 14 per cent alternative investment,” he added.
Wan Kamaruzaman said a bigger allocation would be set aside for alternative investments, as well as listed equity, while the allocation for equity would be reduced due to lower income generated from that segment.
He noted that under the 14 per cent allocation, an allocation of 10 per cent would be for property, three per cent for private equity and one per cent for infrastructure.
“This is in tune with the current economic environment and our take would be banking and technology stocks,” he said.
KWAP’s pension services is being monitored by the government through a Service Level Agreement (SLA), which requires the organisation to achieve a minimum score of 90 per cent.
Last year, KWAP achieve an SLA score of 95.6 per cent, thus ensuring sustained returns and monthly payouts to some 672,000 pensioners in Malaysia.