421 Schemes were covered in the Z-CASS Survey in the final quarter of 2020, and the assets under management covered by the survey were at K Shs 951.8 billion.
Below are the key findings from the Z-CASS Report as of 31 December 2020.
Retirement Schemes’ returns remained in the positive territory in the last quarter of 2020 with a median performance of positive 3.0 percent. This was the second quarter in a row with positive performance offsetting the trend of negative performance in the first half of 2020. The recovery was on the backdrop of improved investor sentiment and progress in COVID-19 vaccination.
The survey profiles schemes into categories based on their asset allocation. Aggressive schemes (schemes with a higher proportion of assets invested in Equity and offshore asset classes) had a weighted average return of 3.8% compared to a 2.6% return for schemes with a lower allocation (schemes with a conservative risk profile). Quarter 4 2020 recorded the best quarterly performance for the Stock market in the year as NASI and the Zamara Kenya Equity Index gained 8.7% and 2.2% respectively.
Retirement schemes recorded a median return of 7.3% over the one year ending 30 December 2020 compared to 17.1% in December 2019. Performance in 2020 was negatively impacted by reduced economic activity brought about by the COVID -19 pandemic. The one-year performance outperformed the annual inflation rate of 5.6%, an indication that most schemes made a gain in the real value of their investments over this period despite the harsh effects of the pandemic.
Retirement Schemes recorded an annualized median return of 10.0% over the three years and 11.3% over the five years. These returns were driven by very strong fixed income performance. Schemes were able to comfortably beat inflation over these periods, with inflation being at 5.1% over the three years and 6.9% over the five years.
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