Abstract:
Asset allocation is an investor’s portfolio spread among various class of assets aimed at
reducing risk and enhancing portfolio performance. This study looked into the performance of
individual retirement benefit pension schemes in Kenya, to establish the effects of investment
in fixed interest assets on the financial performance of individual retirement benefit schemes,
investigate the effects of holding government securities on financial performance of individual
retirement benefit schemes, explore the effects of investing on quoted securities on the
financial performance of individual retirement benefit pension scheme, and to establish the
effects of holding unquoted securities on the financial performance of individual retirement
benefit pension schemes, using financial performance as the dependent variable. Descriptive
research design was used on a target population of 1400 registered schemes, with 32
schemes categorized as individual retirement benefit schemes (IRBS) identified for the study.
From which a sample of 30 schemes was derived applying relevant formula. Using a data
collection sheet, secondary data was collected from the RBA. The data was analyzed using
STATA from which various tests were conducted.Which revealed investment in fixed interest
securities, government securities and investment in unquoted securities increased financial
performance in individual benefit pension schemes, while investment in quoted securities
decreased financial performance in individual benefit retirement schemes. This led to the
conclusion that it’s prudent to invest in fixed interest securities, government securities, and
unquoted securities while it’s impudent to invest in quoted securities. Trustees of individual
retirement benefit schemes were advised to invest in assets that generate positive returns to
the schemes.Key words; financial performance, portfolio spread, asset mix.
