​Strategic Asset Allocation

Why is it important?

KWAP has adopted Strategic Asset Allocation (SAA) as a key element in the investment decision making process. The importance of having an appropriate SAA is crucial in terms of deployment of capital and fund to asset classes which best demonstrates the most optimal risk return trade off. It is a well known and empirically proven fact that asset allocation is the prime driver of investment performance as compared to market timing and security selection. In this aspect, KWAP endeavors to build and develop a better appreciation and greater understanding of the SAA, taking into account both the practical and dynamic evolution of the concept.

Allowable Asset Class

The Investment Panel shall, subject to such restrictions or limitations as may be imposed in any direction issued under subsection 7(4), invest the fund:-​​

  • On deposit in the Ce​ntral Bank of Malaysia (Bank Negara Malaysia), any duly licensed bank or financial institution as defined under the Banking and Financial Institutions Act 1989 (Act 372), any development financial institutions defined under the Development Financial Institutions Act 2002 (Act 618), any Islamic bank under the Islamic Banking Act 1983 (Act 276) and any duly licensed banks or financial institution outside Malaysia in any currency including the Ringgit.
  • In money market instruments, including treasury bills, bankers' acceptances and certificates of deposit in any currency including the Ringgit.
  • In loans, on terms remunerative to the Retirement Fund (Incorporated), to the Federal Government or the Government of any State in Malaysia subject to Article 111 of the Federal Constitution.
  • In loans, on terms remunerative to the Retirement Fund (Incorporated), in respect of any public authority or corporation in which the Federal Government has an interest.
  • In loans, on terms remunerative to the Retirement Fund (Incorporated), in the respect of any company.
  • In bonds, commercial notes, private debt securities, promissory notes and bills of exchange within the meaning of the Bills of Exchange Act 1949 (Act 204) and other negotiable instruments of similar nature on terms remunerative to the Retirement Fund (Incorporated), in respect of any company or corporation.
  • In bonds, commercial notes, private debt securities, promissory notes and bills of exchange within the meaning of the Bills of Exchange Act 1949 (Act 204) and other negotiable instruments of similar nature on terms remunerative to the Retirement Fund (Incorporated), in respect of any public authority of corporation in which the Federal Government has an interst.
  • In the acquisition or subscription for shares or debentures in any public company whose securities are listed or has have been approved for listing on a stock exchange in Malaysia, the issue or sale of which has been approved under the Securities Industry Act 1983 (Act 280).
  • In the securities of companies or corporations which are not listed and quoted on any stock exchange established in Malaysia provided that the total amount of moneys so invested in any one such company or corporation shall not exceed thirty per centum of the total amount of shareholders' funds of that enterprise at the time of the investment unless prior written approval of the Minister is obtained to invest in excess of such percentage.
  • In the acquisition of moveable or immovable property and interests therein.
  • In any other investment with the approval of the Minister.​​​​