Actuarial Services East Africa Limited (ACTSERV) has released its Q2’2023 Pension Schemes Investment Performance Survey noting that the pension industry recorded a total return of 0.1% quarter-on-quarter return in Q2’2023, which was an improvement compared to the 2.9% loss that was recorded during the same period in 2022.
Read more: CPF Group Pension Funds Show Robust Growth and Performance for Year Ending 2022
The performance was largely driven by positive returns in the Offshore asset class of 14.6%, albeit lower than the 17.3% gain that was recorded in Q2’2022. This positive performance was a result of stronger-than-expected economic data, which overcame recession fears.
Additionally, the equities market recorded a slight improvement in performance, with the schemes recording a lower loss of 4.3% in Q2’2023 from the loss of 15.4% that was recorded in Q2’2022. The performance was on the back of divergence between stock prices and corporate earnings growth, which has enhanced attractiveness.
However, the returns from the fixed income securities declined to 0.7% during the quarter, from the 1.5% recorded during the same period last year, with the hike in interest rates and inflationary pressures weighing down on the returns.
The report analysed the data received from 420 pension schemes, which closed the quarter with a total Asset Under Management (AUM) of Kshs 931.7 billion.
ACTSERV noted that the pensions schemes investments were skewed towards fixed-income securities, which had a weighted average allocation of 80.6 per cent. Equities, offshore and cash had a total weighted average allocation of 16.6%, 2.4% and 0.4%, respectively, during the quarter.
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