A Survey of the Investment Portfolio of Pension Funds in Kenya

Abstract

The introduction of RBA brought a lot of changes like introduction of portfolio investment guidelines .These guidelines were to address the problem of over investment in one set of portfolio , this motivated the researcher to do a survey of portfolio investments of pension funds in Kenya.The research problem was to determine the factors influencing choice of pension funds investment portfolio. The objective of the study was to do a survey of pension funds in Kenya, andspecifically to establish factors considered by funds in choosing fund managers, to carry out compliance check on portfolio investment by pension funds, to determine relationship between the RBA guidelines and other investment variables and to determine the degree to which pension fund asset base influence choice of portfolio investment.The study used primary data that was collected using questionnaires. The research design used was descriptive research and survey method. The data was analysed using advances excel (2010), the sample selected was 30 pension funds in Kenya.The findings of the study were 55% of the pension schemes are defined benefit. There is relationship between risk, return, liquidity and RBA guideline. Majority of the pension funds in the industry have an asset base between 500million to 99.9 billion.There is also a relationship between asset base and investment portfolio, also important to note was that the major reasons for choice of the various portfolios are liquidity, return and risk. Finally the research indicated that all the pension funds complied with the RBA portfolio investment guidelines