Investment Portfolio and Performance of Mutual Funds in Nigeria

Abstract

The study examined the performance of Mutual Funds’ investment portfolio in Nigeria. The objective was to investigate the relationship between investments in money market securities, bonds, equity security and return on assets of Mutual Funds in Nigeria. The design of the study was ex-post facto research design. Twelve (12) Mutual Funds listed in the Nigerian Stock Exchange were studied. Data were obtained from the Nigerian Stock Exchange, National Bureau of Statistics, and the Central Bank of Nigeria and analyzed using the ordinary least square (OLS) multiple regression analysis. It was found that investment in money market securities does not significantly influence return on assets of mutual funds in Nigeria. Secondly, it was discovered that there is a significant negative relationship between investment in bonds and returns on assets of mutual funds in Nigeria. Next, investment in equity security does not significantly influence return on assets of mutual funds in Nigeria. Lastly, the study revealed that only investment in equity was positive and statistically significant, investment in bonds was negative and statistically significant while investment in money market securities was positive but statistically insignificant in the model. It was concluded from the findings that investment portfolio influences the performance of mutual funds in Nigeria. Based on the above findings and conclusion, it was recommended among others that mutual funds should focus on investment in equity while investment in bonds should be embarked with caution. Further, investment in money market securities can be plausible if carefully analyzed to ensure that it yield a significant contribution that will compensate for the resources committed by investors.

Keywords: Financial Assets, Investment Portfolio, Individual and Corporate Investors, Mutual Fund, Mutual Fund Companies, Performance of Mutual Funds in Nigeria

DOI: 10.7176/RJFA/15-9-03

Publication date: October 30th 2024