Returns on Pension investments in Kenya declined by 60 per cent in 2020 due to COVID-19 pandemic, according to a report by fund managers, Zamara.
Its report covering 421 schemes with a total of KSh951.8 billion assets under management shows that returns on investing dropped from 17 per cent to 7 per cent in the one year to December 31, 2020.
“Over the one-year period to December 31, 2020, the median return of the participating schemes was 7.3 per cent compared to 17.1 per cent over a similar period in 2019. Performance in 2020 was negatively impacted by reduced economic activity brought about by the Covid -19 pandemic,” said Zamara in their report.
In contrast, the survey showed that schemes that prefer to invest in fixed income outperformed those that prefer the stock market.
The allocation of assets was tilted towards the fixed income segment, averaging 66.5 per cent, equities at 21.3 per cent, property at 11 per cent and offshore investments at 1.2 per cent.
According to the report, aggressive schemes posted the highest median returns over the three –months of the last quarter of 2020 aided by resilience in the stock market over the quarter.
“The recovery in the equity’s performance will be driven by signs of increased economic activity in various sectors and easing of the Covid-19 restrictions,” Zamara analysts said.