The total fund size increased to RM140.80 billion from RM125 billion while the overall gross return on investment (ROI) advanced to 5.77 percent, an increase of 0.42 percent from the previous year’s ROI of 5.35 percent.
The time-weighted rate of return (TWRR) for the year was at 9.09 percent, almost double from preceding year’s rate of 4.59 percent.
In announcing the unaudited figures of KWAP’s financial performance for year 2017, CEO Datuk Wan Kamaruzaman Wan Ahmad expressed continued confidence.
“We continued to deliver and outperform our benchmark, subsequently surpassing our target, resulting in double-digit growth of our fund size at 12.64 percent compared to the previous year’s,” Kamaruzaman said.
“In the last 10 years, the fund recorded an average growth of 12.98 percent per annum, with investment income continuing to be the largest contributor to asset growth,” he continued.
Total collection for 2017 also increased by 4.96 percent which amounted to RM3.51 billion, comprising RM3.01 billion of pension contribution and RM500 million of Federal Government’s contribution.
Cumulatively, investment income remained the highest contributor to the fund in 2017 at 69 percent, followed by employers’ contribution at 27 percent, while the portion from the Federal Government made up the remaining four percent.
In a span of a decade, KWAP’s fund size had grown substantially by 235.72 percent, where it began with a modest fund amount of RM41.94 billion when it was first incorporated on March 1, 2007. Over a period of 10 years, KWAP managed to sustain an average gross ROI of 6.14 percent annually.
“This outstanding performance did not come without any challenges especially in the current low yield and high volatility environment in the past years,” Kamaruzaman said.
“Achieving sustainable asset growth is of utmost importance to us, as it enables KWAP to effectively manage our investments more diligently. We attribute this to the health of our portfolio, sound investment strategy, and robust risk framework,” he added.
Moving forward, KWAP is looking into how their investment strategy might change.
“In view of the global outlook of the market, we will be reviewing our Strategic Asset Allocation (SAA) soon,” Kamaruzaman noted. “This is to ensure that it remains vigorous and dynamic, while in tune with KWAP’s long-term investment aspirations and the current realities. We will continue to seize new opportunities that could help us grow the fund, without compromising our risk appetite,” he said.
The performance of 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 percent.
In 2017, KWAP achieved an SLA score of 95.6 percent, outperforming the target by 5.6 percent.