In 2024, conservative pension schemes have emerged as the top performers in Kenya’s investment landscape, managing 69.2% of the total assets under management (AUM) in the pension sector. According to the latest report by Zamara Consulting Actuaries, these schemes have consistently delivered strong returns, particularly in the fixed income asset class, despite market volatility.
Performance Analysis: The report highlights that conservative schemes, which typically allocate over 80% of their investments to fixed income assets, accounted for 76.4% of the participating schemes. These schemes have shown impressive performance, with an average return of 13.9% over the past year, driven by favorable bond valuations and a downward trend in interest rates.
Moderate and aggressive schemes also saw improvements, with their asset share increasing to 26.8% and 4.0%, respectively. However, conservative schemes outperformed across all periods—quarterly, one-year, three-year, and five-year—thanks to their heavy reliance on fixed income investments.
Market Dynamics: The report also sheds light on the overall market trends, with the equity median return slightly underperforming the Zamara Kenya Equity Index but outperforming NASI. The fixed income median return outpaced both the S&P Bond Index and the 91-day Treasury Bill, reflecting the strong performance of government securities in the current economic climate.
Offshore investments, though showing mixed results, also contributed positively to the overall returns of the schemes. The MSCI ACWI and MSCI World indices saw gains, but the MSCI Emerging Markets index outperformed with a 2.6% return in Kenya Shilling terms.
Conclusion: Conservative pension schemes have solidified their position as a safe haven for investors in Kenya, delivering stable and consistent returns even in uncertain times. As the market continues to evolve, these schemes’ focus on fixed income assets will likely remain a key driver of their success.
