KUALA LUMPUR: Permodalan Nasional Bhd (PNB) can grow its overseas investments at a faster rate if it wants to but Malaysia's largest fund manager prefers "a gradual evolution", its top executive said.

PNB has seen overseas investments making up 19 per cent of its total asset under management (AUM) of RM343.1 billion as of Nov 30 this year, up from 17 per cent in 2021 when the AUM stood at RM337.7 billion.

At end-2020, about 12 per cent of PNB's AUM or RM38.71 billion, was invested globally in multiple asset classes including equities, fixed income and alternative assets such as real estate.

"Can we go faster in our strategic asset allocation globally? Yes we can but we want to be careful and prudent. We want a gradual evolution of our international portfolio," PNB president and group chief executive officer Ahmad Zulqarnain Onn said.

"We will remain steadfast in our diversification efforts with higher allocations in fixed income and alternative assets," he said at a briefing on Wednesday ahead of PNB announcing the dividends for its largest unit trust fund Amanah Saham Bumiputera on Thursday.

While the overseas portfolio has steadily increased especially in the past two years, its contribution to PNB's overall investment income has shrunk.

This trend, Ahmad Zulqarnain suggested, might stay next year given a challenging landscape, with the global economy dragged by aggressive interest rate hikes, persistent inflation and deteriorating geopolitical tensions.

This year, overseas assets may account for nine per cent of PNB's total investment income, markedly down from about 30 per cent in 2021.

This would be bogged down by the lower returns following inflationary pressure, the US Federal Reserve's hawkish monetary policy, the Russia-Ukraine conflict and China's zero Covid policy that had affected the global economy and stock markets, he said.