Abstract

This paper examined the performance of thirteen (13) large-size money market funds in Nigeria based on the net asset values (NAV) as at 31 December 2021. Mutual fund data were obtained from the website of Securities and Exchange Commission, 91-day treasury bills true yield and stop rates which served as proxy for benchmark index and risk-free rates respectively from Central Bank of Nigeria statistical bulletin while returns yielded by the funds were obtained from the audited accounts and factsheets of the mutual funds. The performance evaluation was carried out using Sharpe ratio, Treynor ratio and Jensen’s Alpha for the period January 2018 to December 2021. The result is opposed to previous works that on the average, mutual funds did not generate returns to outperform the market index. All the 13 money market funds recorded positive ratios across all the three measurement ratios. It was observed that mutual funds industry in Nigeria is presently underutilized and underdeveloped. Also, the Nigerian mutual funds sector is heavily concentrated on fixed income investment rather than being widely spread across various investments outlets. The paper points to the need for collaboration between regulators and operators in facilitating awareness and distribution channels while the fund managers are called to select their stocks based on research and analysis as well as to always use risk-adjusted measures in reporting their performance.

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