Risk-Adjusted performance of hybrid and equity mutual funds and unit trusts in Ghana: Panel conditional and unconditional multifactor regression models approach

• Risk-adjusted performance of Collective Investment Schemes (CIS) in Ghana. • Equity and hybrid CIS in Ghana produce risk-adjusted underperformance. • However, hybrid mutual funds generate outperformance. • Conditional and unconditional multifactor models produce slightly varying results. The risk-adjusted performance of Collective Investment Schemes (CIS) is an important aspect of investing, and it is widely used in developed and developing markets. However, in Sub-Saharan Africa, especially Ghana, the literature on fund risk-adjusted performance evaluation is relatively scarce. In this study, we analyse the risk-adjusted performance of equity and hybrid CIS in Ghana from 2011 – 2022, using the conditional and unconditional Jensen alpha, Fama-French three-factor, and Carhart four-factor models. We extend the factor loadings for the Ghana Stock Market and employ the risk-adjusted multifactor regression models on the categories and types of CIS. To minimize survivorship bias, we utilize all CIS that existed over the study period. We show that in tandem with the efficient market hypothesis, equity and hybrid CIS in Ghana produce risk-adjusted underperformance. We also show that the different performance measures do not produce similar results. The study findings provide useful information for CIS investors and potential investors’ decision-making. The study also contributes to the literature on fund performance evaluation in Ghana, which is relatively scarce. This study highlights the importance of evaluating the performance of CIS funds in developing markets using conditional and unconditional risk-adjusted regression performance measures.