The study explored the effect of portfolio
management strategies on portfolio returns of mutual funds in Kenya. The
population of the study was all the mutual funds licensed by CMA as at 2018.
The study concluded that portfolio management strategies have an impact on
portfolio returns. In Kenya, the most preferred strategy was active portfolio strategy.
Mutual funds that employed active and growth portfolio management strategy
generated negative returns, although active strategy is the most preferred
strategy, the costs that the strategy attracts leads to negative returns. Those
that employed value and passive portfolio management strategies generated
positive returns. The study recommends that mutual funds should use value and
passive strategies as they produce positive returns, and this is because of the
low cost incurred when using these strategies.
Keywords: Portfolio Management Strategies, Returns, Mutual funds, Kenya.