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"KWAP achieved net ROI and TWRR of 5.75% and 5.30% respectively in 2011"
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Fixed Income
 
About Fixed Income Department
 
Fixed Income such as government bonds, corporate bonds and short-term debt papers comprises approximately 70-73% of KWAP's investment portfolio. KWAP is an active player in both the local primary and secondary capital markets.
 
Our main objective as Fixed Income fund managers revolves around the search for the best value fixed income investment which minimises risk and maximises return on our investment portfolios over various market environments.
 
Our strategic objective is to outperform the benchmark consistent with a prudent level of risk and in accordance to the KWAP Investment Policy and Guidelines.
 
We strive to achieve high total rate of return on investment by judicious selection and trading of fixed-income instruments, while maintaining a prudent level of risk in accordance with KWAP's investment policies. We have started several initiatives that enable a more proactive approach in the management of our fixed income investments. One such initiative is the Institutional Securities Custodian Program (ISCAP) which aims to enhance the secondary bond trading market and subsequently increases the fee-based income of KWAP. Also, the credit assessment processes of Fixed Income have been established with the goal of minimising the risk and maximising the return on our investment portfolio.
 
We target to build diversified portfolios from a global set of opportunities via:
 
  • Construction of portfolios that are in line with the Investment Policy and Guidelines of KWAP;
  • Identification of macro investment themes that drive the Fixed Income markets, with emphasis on the duration, yield curve and individual sectors;
  • Development of in-house credit scoring and assessment system;
  • Risk allocation via quantitative analysis to maximise investment efficiency.
Performance
 
Despite the stormy investment environment in 2011, KWAP’s total investment in Fixed Income remain resilient, increasing to RM60.0 billion or 76.9% of the total fund size of KWAP. This represented a growth of 16.3% for investment in Fixed Income funds as compared with RM51.6 billion total investment in 2010.

Gross realized return generated from investing in Fixed Income securities amounted to RM2.8 billion or 59.1% of the total Investment Income of KWAP. This represented a 31% significant increase in investment income generated by Fixed Income investment as against RM2.1 billion generated in 2010. For the period January to March 2012, KWAP’s fixed income portfolio registered gross realized income of RM691.6 million. Total fixed income holding for the reviewed period stood at RM52.9 billion.

 
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* Under the new SAA, commercial papers are classified under the money market portfolio while Quasi-Government bonds are classified under the Malaysian Government Bond portfolio effective from 1 January 2010
 
Fixed Income Assets Class
 
The goal of Fixed Income asset allocation is to create an efficient mix of investments or assets classes with the potential of capital appreciation and high interest income yield while tolerating risk or mitigation of investment volatility in different economic and market environments.

The Fixed Income portfolio of KWAP comprises 4 main asset classes namely sovereign bonds, corporate bonds, loans and money market instruments.
   
( mouseover and click on the image to view detail of each asset class)
 
Contact Us
 
Description Names Contact Number Email
Head of Department – Fixed Income Ahmad Norhisham Hassan 21638031 /21638026 hisham@kwap.gov.my
Corporate Desk Ahmad Zahir Mohd Tabri 21638033 Zahir@kwap.gov.my
Khairul Rizal Ahmad 21638039 Khairul@kwap.gov.my
MGS Desk Mohamed Izwan Moriff Mohamad 21638046 Moriff@kwap.gov.my
Money Market Desk Md Hayrani Mireso 21638038 Hayrani@kwap.gov.my
Azlin Zainal Abidin 21638035 azlin@kwap.gov.my
Raihan Waris Megat Abd Waris 21638044 Raihan@kwap.gov.my
Loans Desk Afiza Mustafa 21638034 afiza@kwap.gov.my
Credit Desk Eeh Chong Ban 21638187 chong.b@kwap.gov.my
Isabella Raniee 21638041 Isabellaraniee.s@kwap.gov.my
 
External Fund Managers
 
For the period ending December 2011, Fixed Income investment outsourced to external fund managers stood at RM1.92 billion, representing 2.5% of overall KWAP fund size. Realized income generated from our external fund managers amounted to RM62 million, representing an average ROI of 5.18%. For the period January to March 2012, gross realized income increased to RM19.64 million, representing ROI of 3.9%. Total funds managed by EFM stood at RM1.90 billion. In terms of geographical exposure, 46.2% of externally managed funds were invested in the local bond market and the remaining 53.8% invested globally.
 
List of Domestic External Fund Managers as at 31 March 2012
 
Domestic Fund Inception
CIMB-Principal Asset Management Bhd. 2006
AmInvestment Management Sdn. Bhd. 2007
HwangDBS Investment Management Berhad 2011
 
International Fund Inception
World Bank Treasury 2011
CIMB-Principal Islamic Asset Management Sdn. Bhd. 2011
AmIslamic Asset Management Sdn. Bhd. 2011
 
 
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About Fixed Income Department
Fixed Income Assets Class
Performance
External Fund Managers
Web Rate - Money Market
Web Rate - Malaysia Government Securities
Web Rate - Private Debt Securities