Retirement Benefits Schemes continued to invest heavily in Government Securities, accounting for 45.69% of total assets under management.
According to the Retirement Benefits Authority(RBA) Industry Report for December 2021, investment in government paper was followed by guaranteed funds which accounted for 16.79 per cent, while investments in quoted equities and immovable property each accounted for 16.45 per cent of the total assets under management.
Investment in government securities and guaranteed funds increased by 8.42 per cent and 4.96 per cent, respectively, compared to June 2021, partly due to the shift to safer assets due to the heated political climate due to the August 2022 polls in Kenya and volatility in the stock market.
The offshore investments also continued to record an upward trend increasing from KSh11.38 billion in December 2020 to KSh 19.41 billion in December 2021, representing an increase of 70.59 per cent.
This industry report attributes the trend partly to the depreciation of the Kenya Shilling against the US Dollar and the fact that schemes are pursuing diversification due to the stock market volatility.
Investments in listed corporate bonds also shot up by 134.59 per cent, from KSh 2.9 billion in June 2021 to KSh 6.8 billion in December 2021.
This is partly attributed to the EABL Domestic Medium Note investment, which attracted an oversubscription.
However, investments in unlisted bonds, unquoted equities, fixed deposits, and cash dropped.
Investment in private equity, venture capital and REITs continued to be attractive to schemes due to their diversification effects.
Investment under the “any other assets” category also increased from KSh 730 million to KSh 1.12 billion following the approval for some schemes to invest in the unlisted Income and Development REIT by Acorn Holdings Limited –offered by the Nairobi Securities Exchange under the Unquoted Securities Platform (USP) accounting for 0.07 per cent of the total assets under management.
In its outlook, the RBA Research& Strategy Department maintains that the growth of assets managed by the retirement benefits industry will be sluggish in the first half of 2022, owing to the effects and uncertainties arising from the coronavirus (Covid-19) pandemic, the Russia-Ukraine conflict and the political environment in Kenya.
Available figures indicate that retirement benefits assets under management increased by 4.68 per cent from KSh 1,478.18 billion in June 2021 to KSh1,547.43 billion in December 2021.
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