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Performance Review

For the second quarter of 2019, the average return achieved by the 432 pension schemes with total fund value of about Kshs. 750 Billion(excluding property) participating in the survey was 2.3% compared to 6.5% in the previous quarter.

The decline in performance in this quarter largely due to declines in equity and offshore gains.

The highest performing scheme over the quarter recorded a return of 5.3%.

Over the 3 year period, pension schemes have recorded a return of 9.7% 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 better strategies in order to maximize members’ returns.

The returns on equities for this quarter drastically declined from to 14.0% in the last quarter to 3.0% . This was largely influenced by the dividend payment period in which most stocks traded ex-dividend and weak economic outlook following delayed long rains.

The offshore returns significantly declined as well with a quarter weighted return of 6.2% compared to the previous quarter at 12.5%.This decrease in performance was mostly driven by trade uncertainties and weak global outlook.

The fixed income also achieved a higher quarter return of 4.3% compared to 3.7% in the previous quarter.


Asset Allocation

For the current quarter, it was noted that pension schemes invested most of their funds in fixed income, their allocation was maintained at 74.7%.

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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© Actuarial Services Limited 2019