Volatility and Variability Rewards of Mutual Funds in Ghana Using Jensen Alpha Index

Michael Owusu Akomeah, Yusheng Kong, Wilfred Kwaku Drah, Basil Kusi, Stephen Owusu Afriyie


Investors are finding it difficult to determine the fund that may produce the optimal risk-reward combination. This study was engaged through the application of the Jensen Alpha Index to ascertain the performance of 10 mutual funds listed on the Ghana Stock exchange for a period of 5 years (2010-2014). The results acquired from the analyses indicated that all the 10 listed mutual funds were statistically significant and further elucidate that 90 percent of the fund managers generated excess returns for their investors, while 10 percent being unable to generate excess returns based on their stock selection skills. The overall level of diversification by the fund managers using the adjusted R grounded that, 59.88% on the average of the 10 listed mutual funds on GSE were highly diversified to some extent.

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