Effect of Free Cash Flow Management on Financial Performance of Mutual Funds in Kenya

Dr. Murkor Abiud Soet
University of Agriculture and Technology, Kenya

Professor. Willy Muturi & Dr. Oluoch Oluoch
Lecturer/ Jomo Kenyatta University of Agriculture and Technology, Kenya.


This study focused on effect of free cash flow management on financial performance of mutual funds in Kenya. The specific objective of the paper was to seem into the relationship between free income management and financial performance of mutual funds in Kenya. The study employed causal research design. Secondary panel data from the audited financial statements of twenty-two mutual funds was retrieved from financial reports for the amount 2011-2016. The info was evaluated using the regression technique, random effect model and glued effect model supported Hausman specification tests. The Durbin-Watson test was an accustomed to test for Auto correlation. The p-value at 5% level of confidence for every t-test was wont to make conclusions on whether to just accept or reject the null hypotheses. The findings on the effect of free income management on financial performance showed a positive and negative relationship on ROA and ROE respectively of mutual funds, hence, mangers should endeavor to spice up the extent of free income and financial performance by investing thereby paying higher dividends.