Kenya has witnessed a surge in unit trust investments, with the number of investors rising 7% to 1,299,300 by September 2024, overtaking stock market accounts, which decreased to 1,286,500.
Data from the Capital Markets Authority (CMA) highlights the appeal of unit trusts due to double-digit returns, with money market funds yielding over 15% recently, compared to the declining performance of equities.
Assets under management in unit trusts grew 54% year-on-year to Ksh316 billion, driven by increased awareness, technological accessibility, and attractive returns post-Covid.
Money market funds (MMFs) are a type of mutual fund that invests in short-term, highly liquid, and low-risk financial instruments.
These funds aim to provide investors with a safe place to invest easily accessible cash-equivalent assets while offering a modest return in the form of interest income. They are ideal for preserving capital and providing liquidity.
Key Features :
1. Short-Term Investments:
- Investment Horizon: MMFs invest in instruments that typically have maturities of less than one year, such as Treasury bills, commercial papers, and certificates of deposit.
- Liquidity: Due to their short-term nature, these investments are highly liquid, allowing investors to access their funds quickly when needed.
2. Low Risk.
- Safety of Principal: MMFs focus on capital preservation. The investments they make are generally low-risk, which minimizes the chance of losing the principal amount.
- Stable Returns: While the returns are usually modest compared to other investment types, they are relatively stable and predictable.
3. High Liquidity.
- Ease of Access: Investors can usually withdraw their money from MMFs quickly and with little or no penalty, making these funds a good option for managing short-term cash needs.
4. Daily Compounding.
- MMFs are typically priced daily, allowing investors to know the value of their investments at any given time.
5. Diversification:
- Variety of Instruments: MMFs invest in a diverse range of short-term instruments, which helps spread and mitigate risk.
- Broad Exposure: By investing in a variety of issuers and sectors, MMFs reduce the impact of any single investment's poor performance on the overall fund.
Here are some Money Market Funds in Kenya and their Features.
1) Lofty-Corban.
The Lofty-Corban Money Market Fund is a low-risk investment option managed by Lofty-Corban Investments Limited, regulated by Kenya’s Capital Markets Authority (CMA).
The fund caters to diverse investor needs with three key variants:
KES Money Market Fund for Kenyan Shillings investments.
USD Money Market Fund for dollar-denominated portfolios.
Special Money Market Fund for high-capital investors.
It requires a minimum investment of KSh 1,000 (or KSh 1 million for the special fund) and focuses on short-term securities like Treasury bills, corporate bonds, and bank deposits.
With professional management, high liquidity, and impressive growth, it is designed for both new and seasoned investors.
Access is easy through their online platform, with funds available on short notice.
2) GCIB Money Market Fund.
The GCIB Money Market Fund is managed by GulfCap Investment Bank (GCIB).
It invests in low-risk, short-term assets such as Treasury Bills, bank deposits, and high-quality commercial paper.
This fund caters to individual and institutional investors, including high-net-worth clients, endowment funds, and foundations.
With a focus on capital preservation and liquidity, it offers a stable and secure investment option accessible through GCIB’s asset management services.
3) Etica Money Market Fund.
The Etica Money Market Fund, managed by Etica Capital Ltd, is a tech-driven investment option designed for retail investors.
With a focus on accessibility and efficiency, the fund allows users to invest easily through its digital platforms.
Key Highlights:
Low Entry Point: Start investing with just KES 100, making it one of the most accessible funds in the market.
Daily Compounding: Interest compounds daily, maximizing growth potential for investors.
Convenient Access: Investors can manage their accounts via a mobile app or web portal.
Competitive Fees: The fund applies a 2% annual management fee.
Additional Offerings from Etica Capital:
USD Money Market Fund for dollar-based investments.
Fixed Income Fund targeting medium and long-term growth.
Shariah-compliant Fund available in KES and USD.
The Etica Money Market Fund combines affordability, efficiency, and advanced technology, making it a preferred choice for tech-savvy and first-time investors alike.
4) Kuza Money Market Fund.
The Kuza Money Market Fund provides a secure and accessible investment option, focusing on capital preservation and steady returns.
Key Features:
Minimum Investment: Start with KES 5,000 and top-up from KES 1,000.
Liquidity: Easily access funds when needed, ideal for short-term savings.
Management Fee: A competitive annual fee of 2.00%.
Investment Instruments:
Bank deposits
Treasury bills and bonds
Corporate bonds and commercial papers
Collective investment schemes
The Kuza Money Market Fund is tailored for investors seeking inflation-beating returns, passive income, and minimal risk, supported by a diversified and professionally managed portfolio.
5) Madison Money Market Fund.
The Madison Money Market Fund is managed by Madison Investment Managers Ltd, part of the Madison Group Limited, a fully Kenyan-owned financial services company established in 1988.
Unique Features:
Ownership: Madison is a locally owned institution with a strong reputation in Kenya.
Diverse Offerings: The group also provides products like the Madison Fixed Income Fund and Madison Wealth Fund.
Heritage: The Madison Group has deep roots in Kenya’s financial market, originating from a merger of Crusader Plc and Kenya Commercial Insurance Corporation.
Madison stands out for its long-standing local expertise and comprehensive investment options tailored to different financial needs.
6) Faulu Money Market Fund.
The Faulu Money Market Fund was launched in July 2024 as a partnership between Faulu Bank and the Old Mutual Investment Group (OMIG).
It offers a professionally managed and accessible investment solution.
Unique Features:
Minimum Investment: Start with as little as KES 1,000.
Management Partnership: Operated with the expertise of OMIG for competitive performance.
Parent Support: Backed by a KES 900 million capital boost from the Old Mutual Group.
7) Sanlam Money Market Fund.
The Sanlam Money Market Fund is managed by Sanlam Investments East Africa Limited, part of the Sanlam Group, Africa’s largest non-banking financial services provider.
Unique Features:
Minimum Investment: Start with KES 2,500, with top-ups from KES 1,000.
Income Distribution: Daily interest compounded monthly for steady growth.
Withdrawal Policy: One free withdrawal per month; additional withdrawals incur a fee of KES 500.
Additional Offerings:
Sanlam also provides a Fixed Income Fund, Balanced Fund, and USD Fixed Income Fund, catering to diverse investment needs.
The Sanlam Money Market Fund combines accessibility, flexibility, and professional management, making it a reliable choice for investors at all levels.
8) Britam Money Market Fund.
Managed by Britam Asset Managers, this fund offers accessible investment with a minimum entry of KES 1,000.
It features daily compounding interest and digital management via the Britam app, customer portal, or USSD.
Britam also provides additional products like the Balanced Fund and Equity Fund, catering to diverse investment needs.
9) Jubilee Money Market Fund.
The Jubilee Money Market Fund, managed by Jubilee Financial Services Limited, is part of Jubilee Holdings, the largest insurance group in East Africa.
This fund caters to both individual and corporate investors with a focus on accessible, tax-efficient investments.
Unique Features:
Minimum Investment: Start with KES 5,000, with top-ups from KES 1,000.
Competitive Returns: Designed to outperform traditional bank deposits and 91-day Treasury Bills.
Additional Offerings:
Jubilee Financial Services also provides products such as the Jubilee Balanced Fund and Jubilee Equity Fund, offering diverse investment opportunities for various financial goals.
10) Enwealth Money Market Fund.
The Enwealth Money Market Fund, managed by Enwealth Capital, offers accessible and flexible investment options.
Unique Features:
Minimum Investment: Start with KES 1,000 and top-ups from KES 1,000.
Interest Distribution: Daily interest credited monthly for consistent growth.
Liquidity: Funds can be accessed within T+2 days.
Enwealth Capital also provides investment options like the Balanced Fund and Equity Fund, catering to varied financial goals.
11) Apollo Money Market Fund.
The Apollo Money Market Fund, managed by Apollo Asset Management Company, offers accessible and flexible investment options under the umbrella of Apollo Investments Limited.
Unique Features:
Minimum Investment: Start with KES 1,000 and top-ups from KES 1,000.
Management Fees: Annual fee of 2%, with no initial fees.
Investment Instruments: Includes fixed deposits, treasury bills, commercial paper, and bonds.
12) KCB Money Market Fund.
The KCB Money Market Fund, managed by KCB Bank Kenya, is a secure and accessible investment option.
Unique Features:
Minimum Investment: Start with KES 5,000 and top-ups from KES 500.
Interest Distribution: Daily interest compounded monthly.
Liquidity: Funds accessible within two working days.
How to Invest:
To open an account, visit a KCB Bank branch with the following documents:
National ID copy
KRA PIN certificate
Passport-size photo
The account opening process is quick and easy, typically taking only a few minutes.
13) GenAfrica Money Market Fund.
The GenAfrica Money Market Fund, launched in December 2022, is managed by GenAfrica Asset Managers, a firm with over 25 years of experience in fund management.
Unique Features:
Minimum Investment: KES 500,000, with flexibility for retail investors to start with lower amounts.
Management Fee: 2% annually.
Income Distribution: Monthly, through the issuance of new units.
Growth: Substantial asset growth since inception, reaching KES 1.165 billion as of May 2024.
This fund stands out for its professional management, focus on high-quality investments, and strong growth trajectory, making it an excellent choice for low-risk investors.
14) ICEA Lion Money Market Fund.
The ICEA Lion Money Market Fund is designed for individuals seeking liquidity and capital preservation.
Key Features:
Minimum Investment: KES 500, making it accessible to a wide range of investors.
Interest Calculation: Interest is calculated daily and compounded monthly, enhancing the growth potential of your investment.
Accessibility: Investors can access their funds without penalties. Withdrawals for amounts under KES 10,000 can be processed via mobile money within 24 hours, while larger amounts can be transferred to a bank account within three working days.
Investment Tracking: Investors can monitor their progress through the DigiTrust portal, which consolidates all investment activities in one dashboard.
15) CIC Money Market Fund.
The CIC Money Market Fund, managed by CIC Asset Management Ltd, was launched in June 2011 and is one of the most prominent funds in Kenya, with assets under management of KES 63.78 billion as of 2024.
Unique Features:
Minimum Investment: Start with KES 5,000, with top-ups from KES 1,000.
Management Fee: Annual management fee of 2%, with no initial fees.
Liquidity: Funds can be withdrawn at short notice without penalties.
Professional Management: Managed by seasoned professionals and supported by trusted custodians like Co-op Custodial Services and trustees like Kenya Commercial Bank (KCB).
16) Co-op Money Market Fund.
The Co-op Money Market Fund, managed by Co-optrust Investment Services Limited, offers a flexible, low-risk investment option for individuals and institutions.
Unique Features:
Minimum Deposit: No minimum deposit requirement, making it accessible to all investors.
Liquidity: Withdrawals processed within three days of notice, with accounts updated within 24 working hours.
Interest Calculation: Daily interest credited monthly for consistent growth.
No Minimum Investment Period: Investors enjoy flexibility with no lock-in requirements.
17) Old Mutual Money Market Fund.
The Old Mutual Money Market Fund, managed by Old Mutual Investment Group Kenya, is a low-risk investment product launched on March 24, 2003, designed for retail and institutional investors seeking capital preservation, liquidity, and competitive returns.
Unique Features:
Minimum Investment: Start with KES 1,000 and top-ups from KES 1,000.
Investment Instruments: Short-term high-quality instruments, including Treasury bills, corporate bonds, and negotiable certificates of deposit.
Accessibility: Realtime MPESA payments for digital customers and withdrawals processed within 2–5 working days for manual instructions.
Management: Overseen by KCB Bank Kenya Limited as both trustee and custodian, ensuring professional oversight.
Key Benefits:
Liquidity: Allows easy redemption of funds when needed.
Capital Stability: Diversified portfolio to minimize risk while maintaining stability.
Transparency: Daily price updates provided in newspapers and on their website.
18) Mayfair Money Market Fund.
The Mayfair Money Market Fund, launched on September 21, 2023, is managed by Mayfair Asset Managers Limited.
Unique Features:
Minimum Investment: Start with KES 5,000
Distribution Frequency: Monthly, ensuring steady cash flow.
Fund Size: KES 42 million as of November 2024, reflecting its relatively new entry into the market.
Total Expense Ratio: 2.90%, covering management and operational costs.
Oversight and Custodianship:
Trustee: KCB Bank.
Custodian: Stanbic Bank.
Investment Instruments:
The fund diversifies across short-term investments, including fixed deposits, Treasury securities, call deposits, and cash to ensure stability and liquidity.
Key Benefits:
Quick Access: Provides liquidity for investors requiring easy access to funds.
Professional Oversight: Backed by reliable trustees and custodians for secure investment management.
Transparency: Performance benchmarked against the 91-Day Treasury Bill + 1% for competitive returns.
19) Stanbic Money Market Fund.
The Stanbic Money Market Fund, managed by SBG Securities Limited, a subsidiary of Stanbic Holdings Plc, offers a secure and flexible investment option for retail and institutional clients.
Unique Features:
Minimum Investment: Start with KES 1,000, with top-ups from KES 1,000.
Income Distribution: Interest is calculated daily and accrued monthly, with reinvestment options available.
Accessibility: Funds can be withdrawn within 2–5 working days.
Portfolio Composition: Diversified across fixed deposits (74%), Treasury bills (19.02%), and call deposits (6.95%) as of December 2024.
Management and Oversight:
Trustee: KCB Bank Kenya Limited.
Custodian: Stanbic Bank Kenya Limited.
Auditors: Deloitte Kenya.
20) African Alliance Money Market Fund.
The African Alliance Money Market Fund, managed by African Alliance Kenya Investment Bank Limited, was recently approved by CMA
Unique Features:
Minimum Investment: KES 100,000 initial lump sum, with no minimum for top-ups.
Liquidity: Provides easy access to funds, making it ideal for conservative investors.
Investment Instruments: Diversified portfolio includes Treasury bills, commercial papers, and short-term bank deposits.
Management Fees: Annual fee of 1%.
21) Equity Money Market Fund.
The Equity Money Market Fund (EMMF), managed by Equity Investment Bank (EIB), provides a secure and flexible investment option.
Unique Features:
Minimum Investment: Start with KES 1,000.
Income Distribution: Daily returns credited regularly to investors.
Liquidity: Easy access to funds for flexibility.
Investment Instruments: Diversified in fixed-income securities like treasury bills, bonds, and commercial papers.
Management and Oversight:
Fund Manager: Britam Asset Managers (Kenya) Limited.
Custodian: Equity Bank Kenya Limited.
Trustee: KCB Bank Kenya Limited.
22). Ziidi Money Market Fund.
Safaricom, Kenya’s leading telecom giant, recently unveiled the Ziidi Money Market Fund (MMF).
Piloted in December 2024, the Ziidi MMF has already achieved remarkable success, pooling over Ksh2.85 billion in assets under management from more than 450,000 customers.
This success is attributed to strategic partnerships with Standard Investment Bank (SIB), and ALA Capital Limited, who will handle fund management.
Ziidi MMF is a collective investment scheme that allows investors to pool their resources and invest in low-risk financial instruments. Designed as a unit trust, it offers competitive returns with daily interest accrual.
Customers can conveniently fund their accounts through their M-Pesa wallets. This simplifies the process of investing, making wealth creation accessible to all Kenyans.
Key Features of Ziidi MMF.
Low Minimum Investment.
You can start investing in Ziidi MMF with as little as Ksh100. In addition, there is no maximum investment limit in Ziidi. However, the daily transaction limit of Ksh500,000 and Per transaction limit of Ksh250,000 still apply.
Instant Access to Funds.
You can make deposits or withdrawals instantly through your M-Pesa Wallet. Unlike other MMFs, you don’t have to wait for days or hours for transactions to be processed. Additionally, you have an unlimited number of withdrawals in a day.
Daily interest and Zero Fees.
You earn a competitive daily interest that rivals traditional savings accounts. In addition, the fund offers free withdrawals and deposits.
Security and Transparency
Your Ziidi account is protected by your M-Pesa PIN, with each transaction requiring PIN verification. You can easily track your daily earnings and the performance of your investment.
How to Register for Ziidi MMF.
To register for the Ziidi MMF, you must first have an active M-Pesa account, as this is an eligibility requirement set by the fund managers.
If you already have an M-Pesa account, you can easily access the MMF via the M-Pesa app or by using a USSD code.
Using the M-Pesa App.
· Download the M-Pesa App and Log in
· Navigate to the ‘Grow’ tab
· Select ZIIDI and ‘OPT IN’
Using USSD.
· Dial *334# on your phone
· Select option 5- financial services
· Select option 1- ZIDII
· OPT-IN
Once you opt-in, you will be prompted to key in your personal information. You should carefully read the terms and conditions to understand your rights and responsibilities as an investor.
You will then receive a confirmation message that indicates if your registration was successful.
After successful registration, start making deposits into the funds using the M-Pesa Wallet. And monitor your investments by dialing *334#.
Factor to Consider when choosing the right MMF.
It is essential to ensure that the fund manager is licensed by the Capital Markets Authority (CMA).
A reputable fund manager should operate under the oversight of a trustee and custodian bank.
You should also consider the fund’s asset allocation strategy, as diversification is key to maximizing returns and minimizing risks. A well-managed fund offers diversification across various asset classes, as outlined in its investment policy.
Other important factors to consider are the management fees charged by the fund manager and ease of accessibility.
Review the fund's prospectus to understand its fees, investment objectives, and associated risks. Consulting with a financial advisor can help determine if MMFs align with your investment goals and risk tolerance.
It is crucial to note that income generated from MMFs is subject to a 15% withholding tax, which is remitted to the Kenya Revenue Authority (KRA).
Investors in money market funds should also consider the current inflation rate, short-term interest rates, and the central bank rate (CBR) when making investment decisions. A drop in CBR can have a cascading effect on MMF rates.
Generally, money market funds offer higher interest rates than most interest-bearing bank accounts. However, Sacco dividends remain an attractive option for investors seeking long-term investments.