Are mutual fund managers in Nigeria worth their money? Online publication date: Thu, 16-Oct-2014
by Magaji Adamu Abubakar; Sebastian Seddi Maimako
International Journal of Management Practice (IJMP), Vol. 7, No. 4, 2014
Abstract: This paper examines the performance of mutual fund managers in Nigeria amidst their claims of portfolio management skills and the impact of management fees on such performance. Secondary data were obtained from the Nigerian Stock Exchange. Funds that had minimum four-year returns were selected and tested for persistence using the non-parametric cross-product ratio. We employed the critical t-test for two samples of unequal variances to uncover the significance of fees on the performance of managers. These results revealed a lack of persistence in the performance of mutual fund managers in Nigeria and the fees paid them do not have a significant impact on their performance. The paper argues that no mutual fund manager has superior skills of portfolio management than other managers, although they are all still rendering a useful service to the nation. To drive the emergence of skilful managers and higher market efficiency in Nigeria, the paper calls for market deepening.
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