Malaysia’s sovereign wealth fund, Khazanah Nasional Bhd, is rebalancing its portfolio to increase investments in developed markets, aiming to navigate risks associated with the new Donald Trump administration in the United States, Managing Director Amirul Feisal Wan Zahir revealed.
Currently, Khazanah allocates 59.1% of its portfolio to domestic investments, with North America accounting for 15.5%. The fund’s diverse portfolio spans sectors such as energy, healthcare, IT, and real estate.
Speaking at the World Economic Forum in Davos, Amirul Feisal highlighted the opportunities emerging in developed markets like the US, Europe, and Japan, citing potential benefits from the Trump administration’s policies, including reduced regulation, lower taxes, affordable energy, and inflationary trends. “The US remains an attractive market,” he said during the Reuters Global Markets Forum.
Focus on China and India
Despite potential challenges in China due to Trump’s threats of tariffs ranging from 10% to 60% on Chinese goods, Khazanah intends to maintain its investments in the region. China’s growing middle-income population and dynamic tech sector continue to make it an appealing market, which currently accounts for 8% of Khazanah’s portfolio.
Amirul Feisal also expressed optimism about investments in India, citing strong returns from both public and private markets.
Malaysia’s Resurgence in Foreign Investment
Khazanah remains bullish about Malaysia’s growth prospects, supported by rising foreign direct investments, robust domestic economic activity, and increased household spending.
“Malaysia is somewhat unique—a market that had been overlooked for some time. In 2024, we witnessed significant capital returning to Malaysia,” Amirul Feisal remarked.
The nation has emerged as a standout in Southeast Asia, attracting foreign investors with its improving growth outlook and stable currency. Malaysia welcomed substantial digital investments from tech giants like Google, Microsoft, and Oracle in 2024, which fueled better-than-expected economic growth in the second and third quarters. The ringgit subsequently became one of Asia’s top-performing currencies.
Despite anticipated market volatility, Malaysia’s policies are expected to sustain foreign investment inflows and boost domestic investment through Khazanah and the Employees Provident Fund. “Malaysia is fast becoming a haven in Southeast Asia,” Amirul Feisal noted, positioning the country as a stable alternative amidst regional uncertainty.
