Pension Scheme Survey Performance – Q3, 2021

Performance Review

For the current quarter, the average return achieved by the 421 pension schemes with a total fund value of about Kshs. 890 Billion (excluding property) participating in the survey was 3.4% compared to 5.4% in the previous quarter. This lower return was largely due to the decline in offshore performance attributable to inflation concerns and supply shortages coupled with increased demand.

The lower return can mainly be attributed to lower returns in the offshore and fixed-income asset classes.

The highest-performing scheme over the quarter recorded a return of 13.9%.

Over the 3 year period, pension schemes have recorded a return of 9.9% p.a. The 3-year performance is a better gauge of performance as the volatility of returns is smoothened.

It would be useful for trustees to engage in better strategies in order to maximize members’ returns.

Quarter Performance

Fixed income and offshore returns declined this quarter at 2.9% and 1.9% compared to 3.3% and 10.2% achieved in the previous quarter. The decline in offshore performance was majority driven by inflation concerns and supply shortages coupled with increased demand in offshore markets.

The equities also achieved a lower quarter return of 5.2% compared to 11.9% in the previous quarter.

Asset Allocation

For the current quarter, it was noted that pension schemes invested most of their funds in fixed income, decreasing their allocation to 70.2% compared to 72.5% in the previous quarter.

The allocation to equities slightly increased to 27.9% in the current quarter compared to 25.5% in the previous quarter.

Overall, ideal asset allocation is needed to ensure pension schemes can meet their targeted returns.

For a more detailed report on their performance, download the report here.

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