INFLUENCE OF SECTOR DIVERSIFICATION ON FINANCIAL PERFORMANCE OF PENSION FUNDS IN KENYA
Abstract
The study aimed to investigate the influence of sector diversification on the financial performance of pension funds in Kenya. The current study was guided by capital market efficiency theory. This study employed a descriptive survey research design. The target population consisted of all registered pension systems. The study utilized stratified sampling, categorizing pension systems into two groups: occupational pension schemes and individual retirement schemes. The primary research data was collected using a standardized questionnaire. The collection of secondary data on the financial performance of pension funds encompassed diverse sources such as websites, yearly and published financial statements, annual general meetings, and in-house periodicals. A preliminary investigation was conducted to evaluate the dependability and accuracy. Model diagnostics test was administered to the dependent and independent variables. The analysis of the quantitative data encompassed the utilization of descriptive statistics alongside inferential statistics, such as Pearson correlation and regression analysis. The analysis was conducted using SPSS version 29. Based on the findings, regression and Pearson’s correlation results indicated that there was a positive and significant relationship between sector diversification and the financial performance of pension funds in Kenya. The study recommended conducting thorough sector analysis to identify sectors with favorable growth prospects.
Key Words: Sector Diversification, Pension Funds, Financial Performance
CITATION: Weru, B., Mutegi, D., & Kithinji, M. M., (2024). Influence of sector diversification on financial performance of pension funds in Kenya. The Strategic Journal of Business & Change Management, 11 (3), 361 – 373. http://dx.doi.org/10.61426/sjbcm.v11i3.3033
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DOI: http://dx.doi.org/10.61426/sjbcm.v11i3.3033
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