EFFECTS OF OPERATING EXPENSES ON PERFORMANCE OF UNIT TRUSTS IN KENYA
Description
Abstract
Increasing the investors wealth is the main objective of any rational investor. This objective is achieved when there is increase in share prices. The performance of unit trusts in Kenya however, has been poor compared to the counterparts in the rest of the world. The poor performance is a discouragement to individual and corporate investors in addition to affecting the realisation of financial stability according to the Kenya vision 2030. Empirical literature from developed and emerging markets posits that the operating expense of a fund explain the unit trust funds performance. There is limited empirical literature in Kenya explaining the effects of operating expenses on the performance of unit trust funds. The study therefore investigated the effects of operating expenses of a fund on the performance of unit trust funds in Kenya. The specific objective of the study was to determine the effect of operating expenses on performance of unit trust funds in Kenya. Positivism philosophy and explanatory research design and were adopted in the study. The study established that, operating expenses have a significant negative effect on performance in equity fund and money market fund and a significant positive effect on performance in bond fund and balanced fund. The study concluded that increase in operating expenses decreases performance. The recommendations of the study is that the regulator should come up with a threshold for operating expenses within which unit trusts can charge based on various funds.
Keywords: operating expense, unit trust funds, unit trust performance
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ISRGJEBM1862024.pdf
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