EFFECT OF REGULATORY FRAMEWORK ON GROWTH OF MUTUAL FUND INSTITUTIONS LISTED IN NSE
Abstract
Capital accumulation is regarded as the driving force to spur economic growth, innovation and job creation. The role and importance of Mutual fund institutions is widely appreciated and acknowledged and the Kenyan government has increased emphasis on fund mobilization through legislations which gave birth to Mutual funds. This research sought to determine the effects of regulatory framework on growth of mutual fund institutions listed in NSE. The study used descriptive survey research design. The study targeted 61 funds/ units operating under 18 listed fund institutions in 2016. Random sampling technique was used is to ensure that each fund type is proportionately represented in the sample. Secondary and primary tools were used to supplement data collected. The study results indicated that regulatory framework had significant and positive influence on the growth of mutual fund institutions. The study indicated that the combined correlation between regulatory frameworks constructs and growth of mutual fund institutions linked with return on investment is strong. This result translated into a moderate coefficient of determination (35.6%). Implying that the explanatory power of this model was modest, that is, the independent variable accounted for only 35.6% of the changes in return on investments.
Key Terms: Mutual Funds, Regulatory Framework, Net Assets Value, Return on investment
Full Text:
PDFReferences
Abedifar P, Molyneux P. and Taraza A. (2014). Non-Interest Income Activities and bank Lennding. HAL archives ouvertes.
Aduda & Onmwonga. (2012). The behaviour and Financial performance of indiviadual investor in trading shares of companies listed at the nairobi staock exchange. Journal of Finance and investment Anaysis, 1(3) 33-60.
Agrawl G. & Jain M. (2013). Investor's perception towards Mutual Funds in comparision to other investments. Journal Of Indian Research, 1(4),115-131.
Ahmad W., Roomi M. & Ramzan M. (2015). Acomparative Study on Performance of open and closed-ended Mutual funds in Parkistan. International Journal of Accounting and Finance Reporting, 5(1), 301-314.
Akoko, R. (2014). Eeffects of Mobile transactions on Mutual Funds’ Performance. Unpublishe.
Alan S., Atalay K. & Crossley T. (2010). New Evidence on Taxes and Portfolio Choice. Journal of Public Economics, 94 (1), 813-823.
Allen, K. (2012). Trends in Financial Innovation and Their Welfare Impact:an Overview. European Financial Jpournal, 18(4), 493-514.
Allred S.B. & Ross-Davis A. (2011). The Drop-off and Pick-up Method: an approach to reduce nonresponse bias in natural resources surveys. Small Scale Forestry, 10( 3), 305-318.
Arathy, B, Aswathy A. N., Anju S. P. & Pravitha N. R. (2015). A study of factors Affecting Investment on Mutual funds and its preference of retail investors. International journal of Science and Research Publications., 5(8) 1-4.
Arestedt, K. (2013). Factor Analysis; Exploratory Approaches.
Arkolakis C, Pagageorgiou T. & Timonshenko A. (2015). Firm LLearning and Growth. Institutional repository of Yale University.
Aroni J., Namusonge G. S. & Sakwa M. (2014). Effects of Financial Information on investment in shares- A case of Retail Investors in Kenya. International Journal of Business and Commerce,, 3(3),58-69.
Balamani, P. (2014). Mutual Funds: An Avenue to Investors. International Research Journal of Agriculture and Development, 3(1), 148-161.
Benjamin N. A. , John D. & Sana S. (2013). Global Fund Investor Experience report. Morning Star Fund Research.
Bertin, W., & Prather, L. . (2008). The influence of management structure on the performance of fund of funds. . Paper presented at the 2008 FMA European Conference.
Bhojraj, S., Cho, Y., & Yehuda, N. (2012). Mutual fund size, fund family size and mutual fund performance: The role of Regulation Changes. Journal of Accounting and Research., 50(3) , 647. .
Białkowski, J., & Otten, R. (2011). Emerging market mutual fund performance: Evidence for Poland. North American Journal of Economics and Finance, 22 (1), 118–130. .
Brady A., Anadu E. & Cooper R. (2012). The stability of Prime Money Market Mutual Funds- A sponsor support from 2007-2011. Federal Reserve Bank of Boston, Working Paper RPA 12-3.
Bryant, L., & Liu, H.-C. (2011). Mutual fund industry management structure, risk and the impacts to shareholders. Global Finance Journal, 22 (2), 101-115.
Burrows, T. (2013). The Managegerial Performance of Mutual Funds: an empirical Analysis. Longborough University Institutional Repository.
Caprio, G. (2013). Financial Regulation After the Crisis; How Did We Get Here and How Do We Get Out? New York.: LSE Financial Markets Group special Paper Series.
Central Bank of Kenya. (2010-2016). Kenya financial sector stability reports. Nairobi: Kenya financial sector regulators.
Chandra S. & Kumar R. (2011). Financial Sector Regulation and Implication For Growth,. BIS International Conference.
Cooper D. & Schindelr P. (2013). Research Methods. Mc.Graw-Hill.
Cuerve A. & Ribeiro D. (2011). Entrepreneurship: Concepts, Theory and Perspective. European Journal Of Business and Management., 3(6), 1-9.
Damankah B. S., Anku-tsede O. & Amankwaa A. (2014). Analysis of Non-Interest Income of Commercial Banks in Ghana. International Journal of Academic Research in Accounting, Finance and Management Sciences, 4 (4), 263–271.
Dancan N., Agnes N., Member F. & Tirimba O. (2015). Effects of cash Management on Financial Performance of deposit taking Saccos in Mt. Kenya Region. International Journal of scientific & Research Publications, 5(2), 1-7.
Dancan, J. (2016). Responsible Investments. Nairobi: Old Mutual.
Dar, A. (2015). On The growth Process of Firms: Does Size Matter? International usiness and Economics Research Journal, 14(3)477-484.
Dawe, S. M. (2016). Be Wary Investors: Foremost Factors in Asset Performance in East Africa. A case of Collective Investment Schemes in kenya. Research in Economics and Development,, 1(1), 63-72.
DeVellis, R. F. (2012). Scale devvelopment; Theory and applications (3rd ed.). Thousand Oaks CA;: Sage Publications, Inc.
Fereira M., Keswani A. & Ramos S. (2013). Determinants of mutual fund performance. A crss-country studiy. Journal Of Banking and Finance., 7 (17),483-525.
Ferreira, M., Keswani, A., Miguel, A., & Ramos, S. . (2012). The flow performance relationship around the world. Journal of Banking and Finance, 36(6), 1759-1780.
Field, A. (2013). Discovering statistics using spss. London: Sage.
Galloppo, G. (2010). A comparision of Pre and post Modern Portfolio Theory Using Resampling. Global Journal of Business Research., 4 (1), 1-16.
Garson, D. G. (2012). Testing Statistical Assumptions. North Carolina: Statistical Associates Publishing.
Gazette, T. K. (2010, April). Republic of Kenya gazette notice, No.4770, Volume CXII No. 45.
Gitagia K. & Jagongo A. (2016). Factors that affect Mutualn Fund Performance - Astudy of the Registered Funds In kenya. International Journal of Finance and Economics., 5 (1), 69-80.
Gitagia, F. (2013). Fundamentals that predict mutual fund performance: a case of fund managers in Kenya. Unpublished.
Gitman L. J. & D. M. Joehnk. (2011). Fundamentals of Investing. New york: Prentice Hall.
Goerdeler, K. P. (2013). Evolving Banking Regulations.
Hair, J.F., Black, W.C., Babin, B. J. & Anderson, R. (2010). Multivariate Data Analysis:. Maxwell: MacMillian International Editions.
Huij, J., & Post, T. (2011). On the performance of emerging market equity mutual funds. Emerging Markets Review, 12(2011), 238-249.
Institute, I. C. (2016). The closed-end Funds. ICI Research Perspective.
Iraya, C. (2014). “The Effect of Portfolio Management and Institutional Characteristics on the Relationship Between Socially Responsible Investment & Performance of Mutual Funds in Kenya". Unpublished.
Iveta, G. (2012). Human Resources Key Performance Indicators. Journal of Competitiveness, 4 (1), 117-128.
Jahangir,N. & Begum, N. (2008). the role of perceived usefulness, perceived ease of use, security and privacy, and customer attitude to engender custome adption in the context of electronic banking. . African Journal of Business and management.
Javier, V.-G. (2013). The persistence of European mutual fund performance. Research in International Business and Finance, 28 (2013), 45-67.
Jin, H., & Wu, S. . (2007). A study on differences of performance between bull market and bear market for open-end funds in China.
Jogongo, A. & Mutswenje V. (2014). A Survey of factors affecting Affecting Investment Decisions A case of Individuaal Investors At NSE. Inteernational Journal of Humanitiesand Social Science, 4(4), 92-102.
Julian S. Frankish, Richard G. Roberts & David J. Storey. (2008). Do entrepreneurs really learn? Evidence from Bank Data. Working Paper No.98.
Kagunda, T. (2011). Asset Allocation by Fund Managers and the Financial Performance of Unit trust in Kenya. Unpublished.
Kalayaan, C. S. (2013). Risk-adjusted performance of Equity and Balanced Funds in Philippines. International Journal of Information Technology and Business Management., 14 (1) 49-62.
Kapoor, S. & Sandhu, H. S. (2010). Does it pay to be socially responsible? An empirical examination of impact of corporate social responsibility on financial performance. Global busines review, 11(1), 185.
Karagiannidis, I. (2010). Management team structure and mutual fund performance. Journal of International Financial Markets, Institutions and Money., 20(2), 197-211.
Kibe L. W., Namusonge G. S. & Iravo M. A. (2016). Social Innovation Strategies and the performance of social Enterprises in Nairobi County, Kenya. International Journal of small Business and entrepreneurship Research., 4(2)36-47.
Kimeu, C.N., Anyango, w. & Rotich G. (2016). Behavioral factor influencing individual investors in Unit trusts. Strategic Journal of Business and Change Management., 3(4) 1243-1258.
Klapper L. , Sulla V. & Vittas D. (2012). The Development of Mutual Funds around the World. World Bank Report.
Klynveld Peat Marwick Goerdeler. (2013). Evolving Banking Regulations.
Kothari, C. & Grag, G. (2014). Research Methodology. New Delhi: New Age International.
Kumar, B. (2012). A study on Investrs' attutude towards Mutual funds as an Investment Option. International Journal of Research Management., 2(2) 61-70.
Kumar, R. (2011). Research Methodology. A step-by-step guide for beginners. London,Great Britain:: SAGE Publications Ltd.
Kwabena, N. S. (2011). Entrepreneurship theories and Empirical research: A summry review of Literature. European Journal of Business and Management, 3(6), 1-9.
La Porta, Lopez-de-Silanes, Shleifer & Vishny (LLSV). (2007). Law and Finance. working paper no. 4.
Lai, M.-M., & Lau, S.-H. (2010). Evaluating mutual fund performance in an emerging Asian economy: The Malaysian experience. Journal of Asian Economics., 21 (4), 378-390.
Lakshmi A. & Sasikala V. (2010). the mutual fund performance between 2008 - 2010. A comparative analysis. Galaxy International Interdisciplinary research journal., 29(1)109-136.
Lang G. & Schafer H. (2013). What is the wind behind the sails to go Abroad: Empirical Evidence from Mutual fundd Industry. Center for European Research (Discussion Paper No. 13-022), 13-22.
Le Bas C., Haned N. & Colombelli A. (2011). On Firm Growth and Innovation- Some new Emperical Perspectives Using French CIS. ICER Working Paper No. 7/2011, 1992-2004.
Lei Y, S. (2009). Influence of Organisation structure and Diversification on Medical Practice Insurer Performance. J. Insuarance Regulation, 28(1), 47-71.
Levišauskait, K. (2010). Investment Analysis and Portfolio Management. Lithuania: Vytautas Magnus University Kaunas.
Liu, C. (2009). Analysis of fund investment style, fund performance and the characteristics of funds Manager. Dalian: Dongbei University of Finance and Economics.
Lutwana, J. S. (2010). The development of Collective Investment Scheme in Uganda: An analysis of the factors affecting the development of the Unit trusts in uganda. Kampala: The Capital Markets Authority of Uganda.
Lvisauskaite, K. (2010). Investment Analysis. Lithunia: Life long programe.
Maina, M. (2014). The state of regulation of Mutual Funds in Kenya. Unpublished.
Makori, D. & Jagongo, A. (2013). Working Capital Management and Firm Profitability: Evidence from Manufacturing and construction Firms Listed on Nairobi security Exchange in Kenya. International Joournal of Accounting and Taxation, 1(1), 1-14.
Mareri, E. K. (2017). An Analysis of the factors that would influence investment in infrastructure assets by managers of pension funds in Kenya. Strathmore University. Retrieved from http://su-plus.strathmore.edu/handle/11071/5513.
Matsumoto A. & Szidarozsky F. (2014). Non-linear-Acelerator model with delays in Investment and Consumption. Tokyo: Institute of Economic Research (Discussion Paper no.227.
Matthew, D. S. (2009). Did The 2008 Tax Rebates Stimulate Spending? American Economic Review., 99(2), 374–379.
Mazzucato, M. (2013). Financial innovativion; creative destructionvs. destructive creation. insutrial and corporate change, 22(4) 151-867.
Mehrdad, G., Behrooz G & Mohammad R. (2015). The relationship between Product Diversification strategy with Financial performance & growth in the companies Listed in Tehran stock exchange. Internal Research Journal of Applied and Basic Science., 9 (8), 1407 - 1415.
Mertens, D. M. (2009). Research and Evaluation In Education Psychology; International Diversity with Quantitaive , Qualitative and Mixed methods. New york: Sage Publications.
Mian S. N. & M. N. Nawaz. (2010). Determinanats of Mutual Fiund Growth In Pakistan. International Research Journal of Finance and Economic, 40(2010)75-85.
Miao Y. & Pant M. (2013). Coincident Indicators of Capital Flow. IMF Working Paper.
Miller, E. M., Prather, L. J. & Mazumder, M. I. (2010). Cross-autocorrelations among asset classes: Evidence from the mutual fund industry. Managerial Finance, 34(11), 756-771.
Mishkin F. S. & Eakins S. G. (2009). Financial Markets and Institutionsa. New york: Addison wesley.
Mishra R. (2015). Perception of investors towards mutual funds: An Analytical study in odisha. International journal on recent and innovation trends in computing and communication., 3(7) 4889-4892.
Moore, D. S., Notz W. I. & Flinger, M. A. (2013). The Basic Practice of Statistics. New York: W.H. Freeman & Company.
Morgan, J. (2012). A portfolio Approach to Impact Investment. Yasemin Saltuk : Global Social Science.
Moshen T. & Reg D. (2011). Making Sense of Cronbach's alpha. International Journal of Medical Education., 2(2011),53-55.
Moutinho, L., & Hutcheson, G. (2011). The SAGE Dictionary of Quantitative Management Research. SAGE Publication Ltd.
Mugenda, O. Mugenda. (2009). Research Methods: Quantitative and Qualitative Approaches. Nairobi: Science and Education Publishing.
mutegi J., M. (2017). Regulations of asset-backed securities in Kenya; A comparative Analysis. Unpublished.
Muthaura, P. (2013). Fianancing Options through the capital markets. Capital Market Authority.
Mwangi M. A. & Ngugi K. (2014). Influence of Entrepreneurial Orientation and Growth of Micro and Small Enterprises in Kerugoya, Kenya. European Journal of Business Management, 1(11)417-438.
Mwangi , S. M. & Namusonge, M. (2014). Influence of innovation on small and medium enterprise (sme) growth- a case of garment manufacturing industries in nakuru county. International Journal for Innovation Education and Research, 2(6), 102-112.
Mwaura F., Dawe M. and Porhariyal P. (2014). The performance persistence of equity and Balanced Mutual funds in Kenya. International Journal of Economic and Finance., 6 (8), 153 - 160.
Mwnagi, S. M. & Namusonge M. J. (2014). Influence of innovation on small and Medium enterprise(SME) growth- A case of Garment Manufacturing industries in Nakuru county. nternational Journal for innovation Education and Research, 2(6) 102-112.
Nagib, O. (2012). Effects of Financial Planning on Business Performance; Acase study of Small Businesses in Malindi Kenya. Internationa Journal of risk and contigency management., 11(2) 20--50.
Namusonge G. S., Muturi W. & Olanira O. (2016). The role of Innovation on performance of Firms on Nigeria Stock Exchange. European journal of research and reflection in management science, 4(1), 40-50.
Ngugi, J. K., Mcorege, M. O. & Muiru, J. M. (2013). The Influence of Innovativeness on the Growth of SMEs In Kenya. International Journal of Business and Social Research (IJBSR), 3(1), 25-31.
Nornadiah, M., R. & Yap B., W. (2011). Power Comparison of Shapiro-Wilk, Kolmogorv-Smirnov, Lilliefors and Anderson-Darling Tests. Journal of Statistics Modelling and Analysis, 2(1),21-33.
Nyanamba E., Muturi W. and Nyangau A. (2015). Factors affecting Profitability of Mutual Funds in Kenya. International Journal of Commerce and Management, 3 (11), 445-450.
Okeyo W.,Gathungu J. & K'obonyo P. (2016). Entrepreneurial Orientation, Business Development Services,Business Environment, and Performance: A Critical Literature Review. European Scientific Journal., 12(28), 188-218.
Okioga, C. K. (2013). The CApital Market Authority Effectiveness in the Regulation of Financial Markets perspectives from Financial Sector actors. Australian Journal of Business and Management Research, 2 (11), 15-24.
Olando C., Mbew M. & Jagongo A. (2012). Financial Practice as a Determinant of Growth of Savings and Credit Co-operative Societies' wealth. International Journal of Business and Social Science, 3 (24), 204-219.
Olweny, T. (2011). EFffects of Banking Sectorial Factors on the Prpfitability of Commercial Banks in Kenya. Economics and Finance Review, 1(5), 1 – 30.
Omarova. (2010). Rethinking the Future of Self-Regulation in the Financial Industry. Cornell Law School.
Ombui , K. A and Amenya L. (2016). determinants of financial performance savings & credit cooperative societies in kiambu county kenya. international journal of social sciences & innovation technology, 2(9), 978- 991.
Pallant, J. (2013). Spss survival Manual, 5th ed. Buckingham: Open University Press.
Pandey, I. M. (2010). Financial management (10th ed.). New Delhi: Vikas Publishing House.
Plantier, L. (2014). Globallisation and the global Growth of Long-Term Mutual Fund. Washington, DC: Investment Company Institute,.
Reid, R. (2009). Financial Intermediation, Regulation and Growth. Bruges: International Center for Financial regulation.
Richard, B. (2015). Beyond strategy: A critical review of Penrose's single arguement and its implications for economic development. European Journal of the History of Economic Thought., 22(1), 97–122.
Robson, C. (2011). Real World Research. Wiley.
Roger S., Ying Z. & Amitabh D. (2012). Persistence in Mutual Fund Returns: Evidence from China. International Journal of Business and Social Science , 3(13), 46-50.
Ruhiu, R., Ngugi, K. &Waititu, G. (2014). Effects of Technology Services on the growth of incubated Micro and Small Enterprises in Kenya. International Journal Of Business and Law, 2(3)1-9.
Russel, K. (2013). Global Fund Investor Experience report. morningstar fund Research.
Rusuli, C, Tasmin, R., Takala, J. & Norazlin, H.,. ( (2013). ). Factor retention Decisions in Explaratory Factor Analysis Results: A study Type Knowledge Management Process at Maaysian University Libraries. . Asian Social Science,, 9(15), 1911-2017.
Saini A., Law S. H. & Ahmed A.H. (2010). FDI and Economic Growth; New evidence on the role of financial market. Economics letters., 107(2), 211-213.
Sarita B. & Meenakshi R. (2012). Acomparative Analysis of Mtutal Fund Schemes. International Journal of Marketing, Finance and Management research,, 1 (7), 67- 79.
Sasaka, P., S., Namusonge G., S. & Sakwa M., M. (2014). Effects of strategic management practices on corporate social responsibility performance of parastatals in kenya. European journal of business and innovation, 2(1),106-128.
Saunders N. K., Lewis A. and Thornhill P. (2009). Research Mthodology for Business Students. Boston: Prentice Hill.
Seckhar, G. V. (2013). Role of Indian Mutual Funds in Financial inclusion: Public vs Private. Journal of Business and Management Science.
Sekaran U, .. (2010). Research Methods for Business: A skill building approach (5th ed.). John Willey & Sons' Publisher.
Sekaran, U. & Bougie, R. . (2011). Research Methods for Business: A skill Building Approach. (5th ed.). New Delhi : Aggrarwal Printing Press.
Sekaran, U. (2009). Research Methods for Business: A skill building approach (5 th ed.). New Delhi: Wiley India Private Ltd.
Shane S. & Venkataraman S. (2012). Epistemology, Opportunities and Entrepreneurship. Academy of Management Review., 38(1), 154-166.
Sharma M., Kaur H. & Purva J. (2012). A study on Factors influencing Satisfaction of Investors Towards Mutual Funds Industr An Empirical Study.. International Journal of Management and Business Study., 2(4), 52-56.
Sharma, N. (2012). Indian Investor's perception towards Mutual Funds. Business management Dynamics, 2(2) 01-09.
Sharpe, W. F. (2006). Investments and Markets: Portfolio choices, Asset prices and Investment Advice. New York: Prentice hall.
Sindhu K. P & Rajitha K. (2014). Influence of Risk Perception on Investment Decision: An Empirical Analysis. Journal Of Finance and Bank Management, 2(2), 15-25.
Sondhi, H. J. & Jain, P. K. (2006). Are equity investments well -timed? A study of timing parameters of equity mutual funds in India. Journal of Advances in Management Research., 3(1), 17-25.
Spangler, T. (2012). Overcoming the Governance Challenge in Private Investment Funds through the Enrolment of Private Monitoring Solutions. Unpublished Ph.D Thesis ( London School of Economics).
Standard Chartered. (2013). Explore the field of Mutual Funds. Wealth Mangement Education Series.
Steven A. L. & Richard P. R. (2005). Precis of Demand Uncertainty and Investment in Industry-Specific Capital. Industrial and Corporate Change. European Journal of economic., 1.1(1992), 235-262.
Suppa-aim, T. (2010). Mutual fund performance in emerging markets: the case of Thailand.
Tang, K., Wang, W., & Xu, R. (2012). Size and performance of Chinese mutual funds: The role of economy of scale and liquidity. Pacific-Basin Finance Journal, 20 (2), 228-246.
Theuri, S., Mugambi, F. Namusonge, G. (2015). Strategic Management: Determinants of Value Addition of Industrial Fish processing in sea Food Sub-Chain in Kenya. Unpublished.
Vyas, R. (2012). Mutual Fund Investor's Behavoiur and Perception in Indore City. Journal of Arts, Sciene and Commerce., 3(1), 67-75.
Wamoto J., Ayuma C. & Kimani C. (2016). Entrepreneurial Factors Influencing the performance of Government Funded YouthGroup Enterprises in Turbo Sub-County Uasin County- Kenya. International Journal of Advanced Engineering Research and Science (IJAERS), 3(9)224-235.
Wang, T. (2012). Actively-or passively-managed, which fund is better? Retrieved 11, 12,2012, from China fund.
Wanjiku J. K. & Namusonge G. S. (2013). Factors Influencing Kenyan youth Enterprises towards the Youth Enterprises development fund. International journal of education and research., 1(5) 1-22.
Wanyama, W. D. (2017). Influence of stock market liquidity on the growth of corporate bonds in Kenya. International Journal of Finance, 2(3) 47-62.
Wekesa N. G., Bwisa H. &Namusonge G. (2014). Effects of access to Business Information on Growth of small and medium Enterprises in Kenya. International Journal of Business and Social science, 5(10),121-128.
Yates, P. (2013). Treatment of Sexual Offenders: Research, Best Practices, and Emerging Models. International Journal of Behavioural Consultation and Therapy, 8(34), 89-96.
Young, A. & Pearce, S. . (2013). A beginner's Guide to Factor nalysis: Focusing on Explanatory Factor Analysis. In A. &. Young, Tutorials in Quantitative Methods for Psychology, (pp. 79-94).
DOI: http://dx.doi.org/10.61426/sjbcm.v5i1.656
Refbacks
- There are currently no refbacks.
This work is licensed under a Creative Commons Attribution 3.0 License.
PAST ISSUES:
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.