FACTORS AFFECTING MUTUAL FUNDS INVESTMENT DECISIONS MAKING IN KENYA. A CASE STUDY OF CBA CAPITAL IN KENYA

Abstract

The study investigated the factors affecting individual investment decisions in Mutual funds in Kenya. Four factors i.e. Affordability, Information, Prospects, and Herding were used as independent variables while Investment decision was the dependent variable. The study aimed in determining the effect of affordability on investment decisions, assess the effect of information on investment decisions in mutual funds, and evaluate the effect of herding on investment decisions in mutual funds. The study was significant in helping fund managers to observe general views of factors affecting mutual funds and also benefit economic policymakers who seek to boost investment in different sectors. The research design that was used is a descriptive research and the target population was the customers and employees of CBA of mutual funds who are approximately 1000. The sample size was 100 respondents. Data were collected by the use of a questionnaire. Data were analyzed descriptively using SPSS version 23.0. The findings of the study revealed that affordability, information, prospects, and herding behavior influences mutual fund investment decision. The findings of the study also revealed that there was a positive significant relationship between the factors under study (affordability, information, prospects, and herding) and the level of mutual fund investment decision. The study suggests recommendations that prices of cross-listed stocks need to be affordable so as to allow investors to trade on them. Information on the industrial performance of mutual funds as well as information on dividends per share needs to be clear and available so that investors can make an informed decision while doing their investments.