Investment Strategies, Fund Size and Financial Performance of Defined Contribution Schemes in Kenya: Theoretical Review
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Date
2019
Authors
Muli, Abednego Musau
Jagongo, Ambrose
Journal Title
Journal ISSN
Volume Title
Publisher
International Academic Journals
Abstract
The government directive via Treasury
Circular No. 18/2010 required State
Corporations to convert from Defined
Benefit Schemes (DBs) to Defined
Contribution Schemes (DCs) design not
later than 1st July 2011. This was to enable
the schemes meet funding requirements as
required by the retirement’s benefits
authority (RBA). Investors for DCs in
Kenya have been faced with scheme
overreliance on conservative investment
options which are skewed towards fund
manager default investment strategies
protecting the fund manager at the expense
of the pension investor. This has resulted
to pension members’ exposure to longevity
and investment risks. It is thus essential
that members adopt the right investment
strategies for their assets class to ensure
the highest return possible at maturity and
also the minimum risk exposure to their
fund investment. This paper provides a
background, theoretical review and
empirical review on DCs investment
strategies, fund size and financial
performance respectively in Kenya. This
paper concludes that fund size
significantly influences investment
strategy choice resulting to improved
financial performance for Defined
Contribution Schemes in Kenya.
Description
Research article
Keywords
Investment strategies, Fund size, Financial performance, Defined contribution schemes
Citation
Muli, A. M. & Jagongo, A. (2019). Investment strategies, fund size and financial performance of defined contribution schemes in Kenya: Theoretical review. International Academic Journal of Economics and Finance, 3(3), 253-265