KWAP GROSS REVENUE RISES TO RM9 BILLION

Return on investment improves to 5.77pc while fund size grows to RM140.8b

RETIREMENT Fund Inc (KWAP) registered a gross income of RM9.03 billion last year, 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 last year, compared with 5.35 per cent in 2016.

Last year, total fund grew to RM140.8 billion from RM125 billion in 2016.

“Our fund size of RM140.8 billion reflects a staggering growth of 235.72 per cent in a decade,” said KWAP chief executive officer Datuk Wan Kamaruzaman Wan Ahmad at a media briefing, here, yesterday.

KWAP is the second-largest pension fund in the country after the Employees Provident Fund.

Wan Kamaruzaman said the KWAP board had set a conservative target to expand assets by more than five per cent to RM150 billion at the end of this year.

He said KWAP would review its strategic asset allocation this year, which would see the fund adopting the total return approach instead of focusing on ROI 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, 36 per cent equity and 10 per cent alternative investments. But now, we are working on a 46 per cent fixed income, 40 per cent in equity and 14 per cent alternative investments.”

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 said under the 14 per cent allocation for alternative investments, 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 economic environment and our take would be banking and technology stocks.”

KWAP’s pension services is 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 achieved an SLA score of 95.6 per cent.