An Empirical Analysis of the Performance of Collective Investment Schemes in Nigeria (2014-2018)

International Journal of Research and Scientific Innovation (IJRSI) | Volume VI, Issue II, February 2019 | ISSN 2321–2705

An Empirical Analysis of the Performance of Collective Investment Schemes in Nigeria (2014-2018)

Muideen Adejare Isiaka¹, Lydia Ebehirhmhen Okoh²

^{1, 2}Department of Economics, Accounting & Finance, Bells University of Technology, Ota, Ogun State, Nigeria.

Abstract: This research work analysed the performance of collective investment schemes in Nigeria. It examined empirically the variability of the performance across different types of funds and across time using weekly Net Asset Value data from 2014-2018. The data was extracted from Securities and Exchange Commission journal (SEC) database. The research made use of descriptive statistics, regression analysis and ANOVA test. The results indicated that the weekly performance was not significantly difference among the six types of funds, viz: Ethical Fund, Balanced Based Fund, Bond Fund, Equity Based Funds, Real Estate Fund and Money Market Fund. It is recommended that this study be replicated at ECOWAS or Sub Saharan African level.

Keywords: Mutual Funds, Bond fund, Real Estate Fund, Money Market Fund, Collective Investment Schemes, Year Effect, Month Effect

I. INTRODUCTION

According to Section 153 of the Nigeria’s Investments and Securities Act (ISA) No. 29 of 2007, Collective Investment Scheme (CIS) includes all investment schemes managed by an investment company that enables public to invest money or other assets, hold a participatory interest, share the risk and benefit according to a predetermined basis. A collective investment scheme, mostly mutual fund, enables investors to pool their money resources together in order to participate in capital markets through buying into a diversified, professionally managed portfolio.
Since the growth of CIS in the recent decades, it has played a significant role in the area of providing for retirement income, as increased responsibility is placed on the average citizen, this role will likely increase in the foreseeablefuture in meeting critical needs such as education, retirement and health care. CIS has made it possible for small companies or individual investor to own a diversified portfolio of investment with larger companies.

Read More