KUALA LUMPUR: The Retirement Fund Inc (KWAP) wants to invest more abroad, increasing the foreign exposure in its portfolio to 30 per cent by 2025 despite the currency volatility.
Chief executive officer Nik Amlizan Mohamed said KWAP's focus would be on the real asset class that tended to be more stable than financial assets.
Therefore, Nik Amlizan said inflation, shift in currency values and other macroeconomic factors would affect real assets less than financial assets.
The proportion of foreign investments in the pension fund for civil servants, which held RM159 billion in assets at the end of 2021, stands at 20 per cent at present.
"Currency is not an asset class for KWAP. When we look at our investment, we get specific asset classes which do not involve currency.
"Yes, we do have the intention to increase our exposure internationally. This is mainly because of diversification of asset classes and also our journey to growth globally," Nik Amlizan said during a session of MIDF Conversations here today.
The robust strategic asset allocation would contribute to stronger and sustainable returns to the fund, she added.
The fund also plans to diversify further into the private market, locally and globally.
"We never focus on investment in any specific countries. As for now, we are investing in more than 20 countries globally. We are quite mindful of this plan, but we believe Bank Negara Malaysia will continue to monitor our currency exchange," she said.
Commenting on the preferred sector, Nik Amlizan said for the domestic market, KWAP was focusing on "high impact" investments.
Investments in security assurance, renewable energyand elderly care services are investment sectors that the fund is focused on.
"The banking sector is also seen as attractive by offering stable returns," she said.
KWAP recently announced its intention to achieve a gross fund size of RM200 billion by 2025 and grow its property assets to more than 30 from the existing 17.
It also planned to have more than 35 subsidiaries via its three-year programme, Teras 5.
The key improvements targeted via Teras 5 included restructuring the current organisational structure to elevate the strategy, finance, and digital functions to allow for a more holistic approach to charting KWAP's growth plans.