The Performance of Equity Funds in Developing Countries: A Case of Kenya Mutual Funds over the Period 2006 to 2009


  • Mohamed Shano MERU UNIVERSITY
  • Pokhariyal Ganesh
  • Muroki Mwaura


mutual funds, fund managers, risk, returns, and beta


This research evaluates the performance of equity mutual funds in Kenya. The objective was to compare fund performance for the period 1st January 2006 to 31st December 2009. The research was motivated by the facts that there is hardly any research on mutual funds carried out in less developing economy such as Kenya. The target population was all mutual funds in Kenya. The research used both primary and secondary data. As a source of primary data, structured questionnaires and scheduled interview were used. The secondary data included mutual funds daily returns and annual reports for the period 2005 to 2009 so as to calculate the net asset value and also performance of mutual funds in Kenya. Performance of mutual funds was analyzed using  composite performance evaluation models proposed by Sharpe (1966), Jensen (1968) and Treynor and Mazuy (1966).Over the research period, the finding was that the mutual funds did not perform better than the market on a risk- adjusted basis using various performance measures. The funds were neither preferable nor outperform the market. Further, there were no portfolio diversifications as shown by lower coefficient of determination. However, the individual funds risks were generally lower compared to that of the market as measured using standard deviations and beta. This was consistent with many other empirical findings.

Author Biography


lecturer, accounting and finance


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How to Cite

Shano, M., Ganesh, P., & Mwaura, M. (2014). The Performance of Equity Funds in Developing Countries: A Case of Kenya Mutual Funds over the Period 2006 to 2009. Asian Journal of Business and Management, 2(5). Retrieved from