Influence of Portfolio Diversification on Growth in Wealth of Investment Groups in Kenya

Abstract

This article assessed the Influence of portfolio diversification on growth in wealth of investment groups in Kenya. In research methodology, the study adopted cross sectional survey design. The design also adopted a descriptive and correlational approach that aided on drawing conclusions on the research objectives. The population of interest was composed of investment groups registered by Kenya Association of Investment Groups as availed by the directory. The population comprised of the 4020 groups registered by the Association as at December 2015. The sample size of this study was calculated using the formula for finite population. Since the population is not homogenous. Stratified random sampling was then used in allocation of samples proportionate to size of the strata that were divided into small, medium and large investment groups. The research instrument was a questionnaire. Analysis of the data was done using (SPSS). Regression and correlation analysis was done to test the relationship between the study variables. Group size was used a moderating variable. The study findings indicated that there was a positive and significant relationship between portfolio diversification and growth in wealth of investment groups. The study concluded that portfolio diversification is key to growth in wealth of investment groups. The study therefore recommends that investment groups need to diversify their portfolio to create the investment groups wealth.

Keywords: Portfolio diversification, growth in wealth, investment groups in Kenya.