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"KWAP achieved net ROI and TWRR of 6.79% and 8.63% respectively in 2012"
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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 6 years. The information provided is updated on quarterly basis. The 30 September 2013 figures are as below:
 
  31 Dec 2007 31 Dec 2008 31 Dec 2009 31 Dec 2010 31 Dec 2011 31 Dec
2012
30 Sep
2013
Fund Size at cost
(RM Billion)
48.08 52.04 61.50 70.52 78.93 88.73 96.33
Income and Expenses
(RM Billion)
             
Gross Realised Investment Income
(RM Billion)

3.44



2.98



3.24



4.62


4.66 5.75 4.04
Operating Expenses
(RM Million)
18.33 28.17 25.63 40.07 43.77 62.82 59.85
Net Investment Income
(RM Billion)
3.67 0.56 5.70 4.85 4.30 5.69 3.79
Income and Expenses (%)              
Gross Return on Investment 9.21 5.86 5.62 7.07 6.30 6.84 4.36
Net Return on Investment 9.79 1.12 10.04 7.34 5.75 6.79 3.97
Operating Expenditure to Gross Income Ratio 0.53 0.95 0.79 0.87 0.94 1.09 1.48
Operating Expenditure to Average Fund Size Ratio 0.04 0.06 0.05 0.06 0.06 0.07 0.06
Return and Risk (%)              
TWRR NA NA 11.64 8.88 5.30 8.63 6.20
Volatility NA NA 2.64 1.97 3.80 2.86 2.98
Contribution
(RM Billion)
             
Net Pension Contributions 1.29 1.76 2.66 3.18 2.52 2.67 2.02
Federal Contribution 1.18 1.65 1.10 1.00 1.50 1.50 1.50
Investment Portfolio Composition at cost
(RM Billion)
             
Equity 11.54 13.52 16.16 16.08 23.73 27.37 28.90
Loan and Private Debt Securities 13.66 15.85 17.35 17.74 16.42 25.72 26.83
Malaysian Government Securities and Quasi Bonds 8.74 10.06 15.53 15.64 18.04 22.01 24.44
Money Market Deposit 13.00 14.17 11.69 18.31 16.97 7.80 7.48
Private Equity 0.48 0.52 0.52 0.43 0.43 0.43 0.44
International Equity 0.00 0.00 0.00 0.63 0.81 1.89 2.96
International Fixed Income 0.00 0.00 0.00 0.00 1.02 1.54 1.66
International Private Equity NA NA NA 0.13 0.23 0.24 0.33
International Property 0.00 0.00 0.00 0.38 1.00 1.99 3.52
Management of Fund (%)              
Internally Managed 94.98 94.69 95.25 94.69 92.60 91.06 88.36
Externally Managed 5.02 5.31 4.75 5.31 7.40 8.94 11.64
               
Number of Contributing Employers 475 493 538 568 601 613 495
Number of Members 104,081 106,944 121,572 128,384 134,055 145,855 157,307
Number of KWAP’s Employees 93 99 108 126 152 175 199
Income per Employee (RM Million) 39.99 30.41 30.33 36.25 30.68 32.87 20.35
 
 
Fund Growth 1991 to 30 September 2013
Since the establishment of KWAP in 1991, the fund has grown 193 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 September 2013, KWAP’s fund stood at RM96.33 billion (at cost).
 
 
Investment Fund Allocation 2007 to 30 September 2013
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.
 
 
 
Gross Investment Income 2007 to 30 September 2013
As at 30 September 2013, the gross investment income of KWAP amounted to RM4.05 billion with equity as the largest contributor at RM1.80 billion. This is followed by fixed income namely Loan & PDS at RM1.03 billion, MGS at RM0.69 billion, money market at RM0.017 billion and the remaining is from alternative investments.
 
 
 
Gross Return On Investment By Asset Class 2007 to 30 September 2013
By end of September 2013, KWAP recorded a Gross Return on Investment of 4.36% with the highest ROI contributor being Private Equity at 14.31%, followed by Domestic Equity at 6.40% and International Fixed Income at 4.29%. 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.
 
 
 
Net Return on Investment
As at 30 September 2013, KWAP recorded Net ROI of 3.79%.
 
Total Return
As at 30 September 2013, total return for domestic equity was 9.51%. Total return for domestic internal fixed income (MGS, PDS, Loans and Money Market) stood at 3.28% as at 30 September 2013. The total return for external fixed income as at 30 September 2013, on the other hand was 2.13%.

On the international front, Equity recorded total return of 4.47% as at 30 September 2013. Fixed Income recorded total return of 2.98%.
 
 
Time Weighted Rate of Return (TWRR) year to date 30 September 2013
 
  TWRR Benchmark Outperformance/ (Underperformance) (%) Benchmark Name

(%)

(%)
Equity
Domestic 9.51 6.41 3.10 FBM100
International 4.47 12.46 (7.99)
MSCI All Country World
Fixed Income
Domestic        

MGS & Quasi

2.95 2.56 0.39 Quantshop MGS (All) Yield

PDS

4.15 3.01 1.14 Quantshop Corp (Medium) Yield

Loans

3.61 2.94 0.68 Quantshop MGS (All) Yield + 50 bps

Treasury

2.23 2.40 (0.16) 3-Months KLIBOR

External

2.13 2.09 0.04 Quantshop MGS (All) Index + 130bps
International 2.98 (2.18) 5.17 JP Morgan Global Aggregate Bond Index
*All figures are non-annualised
 
Apart from measuring investment performance on 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.
 
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