The effect of diversification on portfolio returns of mutual funds in Kenya
Abstract
The objective of this study was to determine the effect of diversification on portfolio
return of mutual funds in Kenya.
The study took a descriptive research design approach. The study entailed a sample of 7
mutual funds that had balanced funds with complete records for the year 2013 for a
period of 52 weeks. The study used secondary data sources available at the NSE or
Capital Market Authority offices. The study used the multiple linear regression equation
and the method of estimation was Ordinary Least Squares (OLS) so as to establish the
effect of diversification on portfolio returns of mutual funds in Kenya.
The study revealed that diversification affects the portfolio returns of mutual funds in
Kenya. The study found that diversification positively influences the portfolio returns.
There is need for fund managers to actively craft there investment strategy and impress
diversification so that they can be able to improve the portfolio returns of the fund
holders.
Publisher
University of Nairobi