Determinants Of Equity Mutual Funds Performance In Ghana

ABSTRACT

The main objective of this study is to identify factors that significantly influences the performance

of equity mutual funds in Ghana. The Ghana Stock Exchange (GSE) like most other West African

Exchanges is not robust. The market is not price sensitive to market information and hence the

question how and what factors influence the performance recorded by the market. This uncertainty

about the main drivers of performance of equity mutual funds in Ghana motivated the research on

the topic “Determinants of Equity Mutual Funds Performance in Ghana”

The variables employed in the study included the Gross Domestic Product (GDP) of Ghana, Sex

of the fund manager, Age of the fund, the Ghana Stock Exchange All Share Index and the Size of

the fund measured as the total net asset under management (TAUM).

Consequently, Panel data regression method was employed for the formulation of the models to

be used in the study and STATA 12 is also employed for the analysis of the data gathered for the

period 2010-2017 which is the study period.

The fundamental findings of the study were that the Total Net Asset under Management (TAUM)

and the GSE-All Share Index were relevant and significant factors to explain the performance of

equity mutual funds in Ghana. However, the Sex of the fund manager, the Gross Domestic Product

(GDP) and the age of the fund in operation were not relevant enough to be considered as factors

in determining the performance of equity mutual funds in Ghana.

It is recommended that the government should ensure that the macroeconomic variables of the

economy are well managed since they have an influence on the performance of mutual funds in

Ghana. It is also recommended that Equity mutual fund managers should strive to increase the size

of their funds as this is seen to influence performance positively over time.

In conclusion, it is established that the Total Net Asset under Management (TAUM) and the GSEAll

Share Index are more significant factors to explain the performance of equity mutual funds in

Ghana. The Sex of the fund manager, the Gross Domestic Product (GDP) and the Age of the fund

in operation least important in considering factors in determine the performance of equity mutual

funds in Ghana.