Equity
Unlocking Value from Equity
Equity, as an asset class, plays a significant role in KWAP’s portfolio, generating a considerable portion of KWAP’s total investment income. KWAP’s investment in equities is divided into two broad categories, namely Domestic Equity and International Equity.
In our aspiration to become a High-Performance Organisation, close monitoring of financial performance is a habit. We track a diverse set of performance metrics to measure the performance of equities. A great deal of emphasis is placed on two performance indicators: Return on Investment (ROI), which measures the realised return over average fund invested, and Total Return, as measured by Time-Weighted Rate of Return (TWRR), which tracks the portfolio’s total return inclusive of the realised and unrealised gain. Total Return measurement enables the evaluation of portfolio performance against selected benchmarks. Other performance metrics include portfolio dividend yield relative to benchmark yield, portfolio beta, Sharpe ratio, information ratio and tracking error. These serve as guides for portfolio managers to identify factors affecting their performance.
Our Investment Objectives
To achieve consistent and stable income via dividends and realised gains from sales of shares
To grow capital via long term holdings
To build an optimal portfolio that maximises return at an acceptable level of risk relative to the market
Our Portfolio
Domestic Equity
Allocation for Internal Domestic Equity
We believe that stock picking is the main driver of our performance. Investing in the right sector also strengthens our portfolio over the long term, taking into account economic cycles and changes in investment climates. Allocation of investments across various sectors ensures that the investments are well diversified and remain within the preferred risk parameters.
Benchmarks
Benchmark are given to the respective portfolios as part of the performance measurement process. Below are the benchmarks for the respective equity investment mandates.
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Conventional for Domestic – FTSE Bursa Malaysia Top 100
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Conventional for International - MSCI AC Asia Pacific Ex-Japan & MSCI AC World
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Shariah - FBM Hijrah Shariah
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Small Cap - FBM SmallCap
Outsourced to External Fund Managers
As part of our return enhancement initiative, we allocate a portion of our equity investments to External Fund Managers (EFMs) to manage, with the expectation that the selected EFMs will add value to our portfolio using their experience and expertise.
