Title: Are mutual fund managers in Nigeria worth their money?

Authors: Magaji Adamu Abubakar; Sebastian Seddi Maimako

Addresses: Department of Accounting and Business Administration, Federal University, Kashere, Gombe State, Nigeria ' Department of Business Administration, University of Jos, Plateau State, Nigeria

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.

Keywords: Nigeria; mutual funds; performance persistence; management fees; fund managers; portfolio management; Nigerian Stock Exchange; cross-product ratio; t-test; management performance.

DOI: 10.1504/IJMP.2014.065228

International Journal of Management Practice, 2014 Vol.7 No.4, pp.298 - 308

Available online: 16 Oct 2014 *

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