| dc.description.abstract | This study aimed at identifying the factors affecting the performance of unit trusts in
Kenya. A unit Trust is an arrangement whereby property (shares, bonus and real estate) is
held on trust for a large number of investors. This makes unit trust funds the ideal
alternative, providing cost effective access to a wide variety of local and international
shares / equities (companies listed on a stock exchange), bonds, and money market
instruments such as fixed deposits, treasury bills and call accounts.
The study focused on registered unit trusts in Kenya from January 2008 to December
2011 categorized as money markets , equity and balanced funds due to the fact that that
this were the predominant category of funds representing the extreme ends of the
investment spectrum.
In the analysis of the factors affecting performance, growth in assets, expense ratio, size
of fund, age of fund and the initial investment amount as factors affecting performance of
equity, money market and balanced funds were analyzed using Jensen‟s Alpha model.
The findings of the study show that growth of fund is a critical determinant of
performance of unit trusts. As funds grow larger, they tend to become less efficient in
their operations. The study also found that expense ratio, age of fund, fund size, and
initial investment amount do not have a key influence on performance. | en |
