Factors That Influence Retail Investors to Invest In Collective Investment Schemes: A Case of Nairobi Securities Exchange

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dc.contributor.author Nyambura, Njuguna Ann
dc.date.accessioned 2016-09-28T11:58:01Z
dc.date.available 2016-09-28T11:58:01Z
dc.date.issued 2016
dc.identifier.uri http://erepo.usiu.ac.ke/11732/2737
dc.description A Research Project Report Submitted to the Chandaria School of Business in Partial Fulfilment of the Requirements for the Award of a Degree of Masters in Business Administration (MBA) en_US
dc.description.abstract Many investors are faced with the challenge of finding the right set of investment products to meet their needs. Just as there are many different types of investment management clients, there is a diverse set of investment products available to investors. While many investment opportunities are available in the capital market, most individuals lack the requisite investment skills and cannot afford sufficiently diversified portfolios or execute large trades efficiently. This study sought to examine the factors that influence retail investors to invest in collective investment schemes as a case study of Nairobi securities exchange. The research questions of this study were; What are personal factors influencing retail investors to invest in Unit Trust Funds? What institutional factors influence retail investors investing in Unit Trust Funds? What are product features that affect retail investors while making investment choices? and regulation factors which influence retail investor to invest in Unit Trust Funds? The study adopted a descriptive research design on a population of individual retail investors of collective investment schemes in Nairobi securities exchange from whom a representative sample was acquired using stratified random sampling. From this sample, the study collected primary collected using questionnaires and secondary data. The study realized a response rate of 96% where 143 respondents were realized from a targeted 149. A 58% male and 42% female gender representation was realized, with most of the respondents (44%) being within the 40-49 years age group, and above 50 years (30%), an indication that most of the investors in unit trust are mainly beyond their youthful age with youths shunning the sector. This view was further enhanced by the observation that most of the respondents (67%) had degree level of education, indicating that a high education level is needed for investors within unit trust. The study found a varying portfolio distribution with most of the respondents having portfolio values of above Ksh. 200,000. The study also found that most of the respondents had held their investments between 1-3 years (42%), a relatively short time, followed by 4-10 years (25%), an indication that most of the investors prefer short term to long term investments with most preferring quarterly (42%) and annual (33%) transactions. The findings concluded that personal, institutional, product and regulatory factors influence the retail investors’ decisions in investing in unit trust. Personal factors such as level of disposable income, personal investment objectives, education level, financial literacy and access to information, and age of investor were observed to influence retail investor’s investments in unit trust. Institutional factors such as reputation of the fund manager, unit trust fund past performance, accessibility and distribution network, and minimum investment amount was confirmed to influence retail investor’s investment decisions in unit trust. Product features such as strategy of the fund and liquidity were found to have a significant influence on retail investors’ unit trust investment. Regulation factors composed of tax, fund manager disclosure and transparency were found to have an impact on the unit trust investment by retail investors. The study recommended that these factors to be considered by investors, managers and unit trust institutions so as to improve access and acceptability of the unit trust investment to the retail investors. The study suggested further studies to be carried out in other investment forms present in Kenya to determine the influence of these personal, institutional, product features, and regulation factors on their adoption, so as to bring out further understanding of the investment sector, especially the unit trust investments. en_US
dc.publisher United States International University - Africa en_US
dc.subject Retail Investors en_US
dc.subject Collective Investment Schemes en_US
dc.subject Nairobi Securities Exchange en_US
dc.title Factors That Influence Retail Investors to Invest In Collective Investment Schemes: A Case of Nairobi Securities Exchange en_US
dc.type Thesis en_US

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