The Effect Of Investment Strategies On The Financial Performance Of Collective Investment Schemes In Kenya, North Kenya, Wajir Branch

ABSTRACT

The purpose of this study was to assess the effect of investment strategies on the financial

performance of collective investment schemes in Somaliland. The research questions therefore

were; what are the preferred investment strategies by collective investment schemes and what is

the effect of investment strategies on the financial performance of collective investment schemes

in Somaliland?

The research design was descriptive survey study in nature since it focused on all collective

investment schemes in Somaliland. The population of the study was all the collective investment

schemes in Somaliland. This implied that the total population of this study is 16 investment

schemes firms. The study used both primary and secondary data from the financial statements of

the investments firms. The selected period was 5 years. The researcher used frequencies,

averages and percentages in this study. The researcher used Statistical Package for Social

Sciences (SPSS) to generate the descriptive statistics and also to generate inferential results.

Regression analysis was used to demonstrate the relationship between the investment strategies

and the profitability of the collective investment schemes.

The findings reveal that collective investment schemes in Kenya had adopted two types of

;trategy which are passive and active. However the study findings revealed that these strategies

.vere further categorized into five categories which include aggressive, value, moderate risk,

;onservative and high risk aversion strategies. The findings also revealed that there was a

)OSitive and significant relationship between investment strategy and profitability and return on

tssets.The study recommended that the collective investment schemes to pursue passive strategy

)ecause it yields superior profitability than active strategy, that the firms should pursue passive

:trategy as it yields superior returns on assets compared to active strategy, It was also

·ecommended that the governance structures need to be put in place so as to enhance returns of

he stock exchange and that the investment firms to adopt different forms of investments such as

nvestment property, real estate investments, mutual funds, government securities and equity.