Story by, Stanley James, Business Editor

ZIMBABWE’S pension funds have spent over 47% of their income on property investments to ensure long-term returns to contributors.

The latest data from the Insurance and Pensions Commission (IPEC) shows that the industry’s assets are concentrated in the real estate sector and quoted equities that combined income dominance of over ZW$1,95 trillion during the first quarter of the year.

Investments in the real estate sector have emerged as an innovative way in which pension funds are hedging against the exchange rate-driven pressures as well as an avenue for long-term appreciation of returns.

Other asset portfolios being used by the pension funds sector to invest funds include prescribed assets, unquoted equities, money markets and cash at banks.

In terms of property assets, the pension funds are being heavily linked to the ongoing shopping mall construction projects, housing, commercial stands, and office parks, among others.

Gold coin investments, according to IPEC, are also emerging as an important store of value for contributions by pension funds.

Pension funds purchased over 70 gold coins in the first quarter of the year, whose initial cost of over ZW$2 billion appreciated in value to more than ZW$3,5 billion due to exchange rate movements.

Investments on the Victoria Falls Stock Exchange (VFEX) are also dominating the foreign currency-denominated assets for the pension sector.

They are being followed by investments concentrated on government-approved projects in different portfolios, the prescribed assets.

IPEC states that foreign currency assets in the sector, which are hovering at over US$250 million, are also cushioning the sector against macro-economic challenges, climate change effects and global economic uncertainties.