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 4 years. The information provided is updated on a monthly basis. The June 2011 figures are unaudited and subject to future amendments.

	31 Dec 2007	31 Dec 2008	31 Dec 2009	31 Dec 2010	30 June 2011
Fund Size at cost (RM Billion)	48.08	52.04	61.50	70.52	75.75
Income and Expenses (RM Billion)
Gross Realised Investment Income (RM Billion)	3.44	2.98	3.24	4.62	2.34
Operating Expenses (RM Million)	18.33	28.17	25.63	40.07	16.96
Net Investment Income (RM Billion)	3.67	0.56	5.70	4.85	2.50
Income and Expenses (%)
Gross Return on Investment	9.21	5.86	5.62	7.07	3.25
Net Return on Investment	9.79	1.12	10.04	7.34	3.41
Operating Expenditure to Gross Income	0.53	0.95	0.79	0.87	0.72
Operating Expenditure to Average Fund Size	0.04	0.06	0.05	0.06	0.02
Return and Risk (%)
TWRR	NA	NA	11.64	8.88	4.00
Volatility	NA	NA	2.64	1.97	1.62
Contribution (RM Billion)
Net Pension Contributions	1.29	1.76	2.66	3.18	1.26
Federal Contribution	1.18	1.65	1.10	1.00	1.50
Investment Portfolio Composition at cost (RM Billion)
Equity	11.54	13.52	16.16	16.08	22.51
Loan and Private Debt Securities	13.66	15.85	17.35	17.74	17.69
Malaysian Government Securities	8.74	10.06	15.53	15.64	19.00
Money Market Deposit	13.00	14.17	11.69	18.31	13.21
Private Equity	0.48	0.52	0.52	0.55	0.60
International Equity	0.00	0.00	0.00	0.63	0.93
International Fixed Income	0.00	0.00	0.00	0.00	0.46
International Property	0.00	0.00	0.00	0.38	0.38
Management of Fund (%)
Internally Managed	94.98	94.69	95.25	94.69	93.79
Externally Managed	5.02	5.31	4.75	5.31	6.21

Number of Contributing Employers	475	493	538	568	585
Number of Members	104,081	106,944	121,572	128,384	130,142
Number of KWAP’s Employees	93	99	108	126	141
Income per Employee (RM Million)	39.99	30.41	30.33	36.25	17.83

Fund Growth 1991- June 2011

Since the establishment of KWAP in 1991, the fund has grown 103 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 30 June 2011, KWAP’s fund stood at RM75.75 billion (at cost).

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Investment Fund Allocation 2007 - June 2011

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

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Gross Investment Income 2007 - June 2011

As at 30 June 2011, the gross investment income of KWAP amounted to RM2.34 billion with equity as the largest contributor at RM1.18 billion. This is followed by fixed income namely Loans & PDS at RM0.45 billion, MGS at RM0.40 billion, money market at RM0.25 billion and the remainder is from private equity and international investments.

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Gross Return On Investment By Asset Class 2007 - June 2011

By end of June 2011, KWAP recorded a Gross Return On Investment of 3.25% with the highest ROI contributor being private equity at 10.52%, followed by equity at 6.11% and Loan & PDS at 2.55%. 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.

FusionCharts

Net Return on Investment

As at 30 June 2011, KWAP recorded Net ROI of 3.41%.

Time Weighted Rate of Return (TWRR) YTD June 2011

	TWRR	Benchmark	Outperformance/ (Underperformance) (%)	Benchmark Name
	(%)	(%)	Outperformance/ (Underperformance) (%)	Benchmark Name
Equity
Domestic	7.67	4.91	2.76	FBM100
International	21.66	1.91	19.76	MSCI All Country World
Fixed Income
MGS & Quasi	2.30	1.75	0.55	Quantshop MGS (ALL) Yield
PDS	2.69	2.16	0.53	Quantshop Corp (Medium) Yield
Loans	2.39	2.00	0.39	Quantshop MGS (ALL) Yield + 50 bps
Treasury	1.57	1.55	0.02	3-Months KLIBOR
External	3.94	1.94	2.00	Quantshop MGS (All) Index + 130bps
International	1.56	0.36	1.20	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 30 June 2011, total return for domestic equity was 7.67% whilst international equity was higher at 21.66%. Total return for domestic internal fixed income (combined returns of MGS, PDS, Loans and Money Market) and externally managed fixed income stood at 2.16% and 3.94% respectively. On the other hand, international fixed income total return was 1.56% over the same time span.

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