Financial Highlight

Financial Highlights

The table below provides a snapshot of key financial indicators based on the fund’s position since 31 December 2007. The table also illustrates and reflects the investment as well as operational strategies undertaken by KWAP throughout the past 5 years. The information provided is updated on a monthly basis. The 31 March 2012 figures are unaudited and subject to future amendments.

	31 Dec 2007	31 Dec 2008	31 Dec 2009	31 Dec 2010	31 Dec 2011	31 Mar 2012
Fund Size at cost (RM Billion)	48.08	52.04	61.50	70.52	78.93	82.61
Income and Expenses (RM Billion)
Gross Realised Investment Income (RM Billion)	3.44	2.98	3.24	4.62	4.66	1.20
Operating Expenses (RM Million)	18.33	28.17	25.63	40.07	43.77	12.03
Net Investment Income (RM Billion)	3.67	0.56	5.70	4.85	4.30	1.61
Income and Expenses (%)
Gross Return on Investment	9.21	5.86	5.62	7.07	6.30	1.50
Net Return on Investment	9.79	1.12	10.04	7.34	5.75	2.00
Operating Expenditure to Gross Income	0.53	0.95	0.79	0.87	0.94	0.99
Operating Expenditure to Average Fund Size	0.04	0.06	0.05	0.06	0.06	0.01
Return and Risk (%)
TWRR	NA	NA	11.64	8.88	5.30	2.97
Volatility	NA	NA	2.64	1.97	3.80	1.15
Contribution (RM Billion)
Net Pension Contributions	1.29	1.76	2.66	3.18	2.52	0.65
Federal Contribution	1.18	1.65	1.10	1.00	1.50	1.50
Investment Portfolio Composition at cost (RM Billion)
Equity	11.54	13.52	16.16	16.08	23.73	26.16
Loan and Private Debt Securities	13.66	15.85	17.35	17.74	16.42	21.54
Malaysian Government Securities	8.74	10.06	15.53	15.64	18.04	20.42
Money Market Deposit	13.00	14.17	11.69	18.31	16.97	10.02
Private Equity	0.48	0.52	0.52	0.43	0.66	0.69
International Equity	0.00	0.00	0.00	0.63	0.81	1.03
International Fixed Income	0.00	0.00	0.00	0.00	1.02	1.02
International Property	0.00	0.00	0.00	0.38	1.00	1.00
Management of Fund (%)
Internally Managed	94.98	94.69	95.25	94.69	92.60	92.54
Externally Managed	5.02	5.31	4.75	5.31	7.40	7.46

Number of Contributing Employers	475	493	538	568	601	603
Number of Members	104,081	106,944	121,572	128,384	134,055	136,958
Number of KWAP’s Employees	93	99	108	126	152	157
Income per Employee (RM Million)	39.99	30.41	30.33	36.25	30.68	7.74

Fund Growth 1991- March 2012

Since the establishment of KWAP in 1991, the fund has grown 113 times in size. The growth was attributed to the contributions by the Federal Government, contributions by employers and accumulation of investment income over the years. As of 31 March 2012, KWAP’s fund stood at RM82.61 billion (at cost).

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Investment Fund Allocation 2007 - March 2012

Over the years, KWAP has adopted a prudent investment strategy with long term investment objectives. Besides growing the fund, KWAP acknowledges the risks associated in the management of the fund and therefore maintains a sound risk management framework. The distribution of fund reflects heavier weightage in fixed-income instruments as compared to the more volatile asset classes, which is in line with the long term SAA (Strategic Asset Allocation) of KWAP.

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Gross Investment Income 2007 - March 2012

As at 31 March 2012, the gross investment income of KWAP amounted to RM1.20 billion with equity as the largest contributor at RM0.48 billion. This is followed by fixed income namely MGS at RM0.30 billion, Loan & PDS at RM0.27 billion, money market at RM0.12 billion and the remainder is from alternative investments.

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Gross Return On Investment By Asset Class 2007 - March 2012

By end of March 2012, KWAP recorded a Gross Return On Investment of 1.50% with the highest ROI contributor being International Equity at 2.35%, followed by Domestic Equity at 1.92% and MGS at 1.56%. Strong equity market performance had significantly enhanced the overall ROI achievement. Fixed-income instruments showed a fairly consistent ROI mainly due to smaller yield fluctuations.

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Net Return on Investment

As at 31 March 2012, KWAP recorded Net ROI of 2.00%.

Time Weighted Rate of Return (TWRR) year to date 31 March 2012

	TWRR	Benchmark	Outperformance/ (Underperformance) (%)	Benchmark Name
	(%)	(%)	Outperformance/ (Underperformance) (%)	Benchmark Name
Equity
Domestic	6.31	4.21	2.10	FBM100
International	9.14	4.24	4.90	MSCI All Country World
Fixed Income
MGS & Quasi	1.56	0.81	0.75	Quantshop MGS (ALL) Yield
PDS	1.66	1.04	0.62	Quantshop Corp (Medium) Yield
Loans	1.11	0.94	0.17	Quantshop MGS (ALL) Yield + 50 bps
Treasury	0.88	0.79	0.09	3-Months KLIBOR
External	1.84	0.93	0.91	Quantshop MGS (All) Index + 130bps
International	(2.90)	(1.16)	(1.74)	BofA Merrill Lynch Global Government Bonds

*All figures are non-annualised

Apart from measuring investment performance on an absolute basis (ROI), KWAP also measures the performance of each asset class relatively against benchmark indices (Total Return).

Total return for passively managed internal fixed income securities (comprising MGS, PDS, Loan and Money Market) are based on accrued basis with the securities valued at cost. Total return for internal and external managed equity is benchmarked against FTSE Bursa Malaysia KLCI (FBM KLCI). Externally managed fixed income total return is benchmarked against Quantshop MGS (All) Index plus 130 basis point as per the investment mandate.

As at 31 March 2012, total return for domestic equity was 6.31%. Total return for domestic internal fixed income (MGS, PDS, Loans and Money Market) stood at 1.32% as at 31 March 2011. The total return for external fixed income as at 31 March 2012, on the other hand was 1.84%. On the international front, Equity recorded total return of 9.14% and Fixed Income recorded total return of -2.90%.

Business Performance

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