Effect of Investment Diversification in Short-term Government Securities on the Financial Performance of Retirement Benefits Schemes in Kenya

Authors

  • Dominic Shukrani Kenga Technical University of Mombasa, Kenya
  • Dr. Abdulkadir Ali Banafa Technical University of Mombasa, Kenya
  • Dr. Abdullah Ibrahim Ali Technical University of Mombasa, Kenya

DOI:

https://doi.org/10.53819/81018102t2296

Abstract

The study investigated the effect of investment diversification in short-term government securities on the financial performance of the retirement benefits schemes in Kenya. The study further investigated the moderating effect of the foreign exchange rate on the relationship between the independent and the dependent variable. The liquidity preference theory was employed in supporting this study. The study embraced a descriptive research design and the study population constituted of 87 retirement benefits schemes. The stratified random sampling technique used resulted into having 72 units of analysis. Primary and secondary quantitative data were employed in this study. Data analysis was through the statistical package for social sciences. The hypothesis testing led to the rejection of H01, and H02. The rejection H01 confirmed that investment diversification in short-term government securities has a significant positive effect on the financial performance of the retirement benefits schemes in Kenya. The rejection of H02 confirmed that foreign exchange rate has a significant positive moderating effect on the relationship between investment diversification in short-term government securities and the financial performance of the retirement benefits schemes in Kenya. The researcher therefore, recommends that the retirement benefits schemes should consider diversifying their investments in short-term government securities because it affects their financial performance. The researcher also recommends that the schemes should be cautious on the volatility of the foreign exchange rate because it has a moderating effect on the relationship between the investment diversification in short-term government securities and their financial performance.

Keywords: Short-term Government Securities, Investments Diversification, Portfolio, Financial Performance, Retirement Benefits Schemes

Author Biographies

Dominic Shukrani Kenga, Technical University of Mombasa, Kenya

PhD Fellow, Technical University of Mombasa, Kenya, P.O. Box 90420-80100, Mombasa, Kenya

Dr. Abdulkadir Ali Banafa , Technical University of Mombasa, Kenya

Lecturer, Technical University of Mombasa, Kenya, P.O. Box 90420-80100, Mombasa, Kenya

 

Dr. Abdullah Ibrahim Ali, Technical University of Mombasa, Kenya

Lecturer, Pwani University, Kenya, P.O. Box 195-80108, Kilifi, Kenya

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Published

2024-01-05

How to Cite

Kenga, D. S., Banafa, D. A. A., & Ali, A. I. (2024). Effect of Investment Diversification in Short-term Government Securities on the Financial Performance of Retirement Benefits Schemes in Kenya. Journal of Finance and Accounting, 8(1), 1–13. https://doi.org/10.53819/81018102t2296

Issue

Vol. 8 No. 1 (2024)

Section

Articles