Are you looking to stash away your savings? What are the best money market funds in Kenya that earn consistent competitive returns with minimal risk exposure?
Money market funds are definitely a very popular low-risk investment option among investors. These funds invest in short-term, low-risk securities such as government bonds, treasury bills, commercial papers, bank deposits and more. As such, they offer competitive rates, long-term stability, and consistent and predictable returns which attract both inexperienced and experienced investors. They are the safest ways to grow your wealth through the power of compound interest with high liquidity and ease of access for capital preservation.
In this article, we will guide you through some of the best money market funds in Kenya with a focus on their performance, reputation and other vital factors.
1. Cytonn Money Market Fund – EAR 11%
The Cytonn Money Market Fund is the most popular and is considered the best fund among the best money market funds in Kenya. I believe this notion in the minds of investors is purely based on the fund’s return. The Cytonn Money Market Fund is currently the highest-earning Money Market Fund in Kenya. This fund is quite popular among Kenyan investors for delivering impressive yields over the years. In the past, the fund has faced some liquidity challenges and has since made strides to improve its operations with particular emphasis on risk management practices. However, please do not just take my word for it. It’s always advisable to conduct your own updated research and consult widely with the latest information before making any investment decisions.
The objective of the Cytonn Money Market Fund is to “obtain a high level of current income while protecting investors’ capital and liquidity.”
The Cytonn Money Market Fund Fact Sheet:
- Launch Date: Nov 2017
- Fund Manager: Cytonn Asset Managers Limited
- Benchmark: Average 91-day T-Bill plus 1.0% points
- Effective Annual Rate: 11%
- Annual Management Fees: 1.5% pa
- Minimum Investment: KES 1,000
- Minimum Top-up: KES 100
- Initial Fee: Nill
- Redemption Fee: Nil
- Trustee: Goal Advisory
- Custodian: SBM Bank Kenya Ltd
- Risk Profile: Low
Related: Should You Save With A Money Market or Savings Account?
2. Madison Money Market Fund – EAR 10.8%
The Madison Money Market Fund invests in a diversified portfolio of short-term debt securities, such as treasury and bank certificates of deposits. The fund has a low expense ratio and a consistent track record of performance since inception. As such, the Madison Money Market Fund is a good option for investors who are looking for low-risk investments with the opportunity to generate competitive returns over the short or long term.
The objective of the Madison Money Market Fund is to “achieve capital preservation by investing in short-term money market instruments…”
Here are some highlights of the Madison Money Fund Fact Sheet:
- Launch Date: Nov 2011
- Fund Size: KES 3.0B
- Fund Manager: Madison Investment Managers Ltd
- Benchmark: Average 91-day T-Bill
- Effective Annual Rate: 10.8%
- Annual Management Fees: 2% pa
- Minimum Investment: KES 5,000
- Minimum Top-up: KES 1,000
- Initial Fee: Nill
- Redemption Fee: Nil
- Trustee: KCB Bank Kenya Ltd
- Custodian: Equity Bank Kenya Limited
- Auditor: Deloitte & Touche LLP
- Risk Profile: Low-Medium
3. Zimele Money Market Fund – EAR 9.9%
The Zimele Money Market Fund, more commonly known as Zimele Savings Plan is a low-risk high yielding fund investing in a diversified portfolio of assets such as bank deposits, treasury bills and bonds. The fund offers investors the opportunity to build up substantial savings in a fund that prides itself in flexible operational convenience.
Here are some facts about the Zimele Money Market Fund:
- Launch Date: Aug 1988
- Fund Size: KES 1.2B
- Fund Manager: Zimele Asset Management Company
- Benchmark: Average 91-day T-Bill
- Effective Annual Rate: 9.9%
- Annual Management Fees: 2% pa
- Minimum Investment: KES 100
- Minimum Top-up: KES 100
- Initial Fee: Nill
- Redemption Fee: Nil
- Trustee: KCB Bank Kenya Ltd
- Custodian: Standard Chartered Bank
- Auditor: Dennis Paul & Associates
- Risk Profile: Low
4. Sanlam Pesa+ Money Market Fund – EAR 9.8%
The Sanlam Money Market Fund primarily invests in high-quality fixed-income securities such as treasury securities, corporate debt and cash and bank deposits, providing investors with a low-risk investment option. The fund has over the years maintained a stable and predictable return profile for its investors, making it a great choice for conservative investors.
The objective of the Sanlam Pesa+ Money Market Fund is to “deliver a higher level of income compared to average banks’ fixed deposit. Capital preservation is of primary importance and the fund offers immediate liquidity”
The main highlights of the Sanlam Pesa+ Money Market Fund:
- Launch Date: Nov 2014
- Fund Size: KES 17.3 billion
- Fund Manager: Sanlam Investments East Africa Limited
- Benchmark: 182 – day T- bill + 1% p.a (Money market, 100%)
- Effective Annual Rate: 9.81%
- Annual Management Fees: 1.2%
- Minimum Investment: KES 2,500
- Minimum Top-up: KES 1,000
- Initial Fee: Nill
- Redemption Fee: Nil
- Trustee: Stanbic Bank Kenya Limited
- Custodian: Stanbic Bank Kenya Limited
- Auditor: PwC
- Risk Profile: Low
5. CIC Money Market Fund – EAR 9.4%
In CIC Money Market Fund is also another favourite Fund amongst Kenyans. It is managed by CIC Asset Management Limited, which is a subsidiary of the CIC Insurance Group – a well-established financial institution with over five decades shoulder the risk of clients. As such, the Fund has a reputation for prudence and effective risk management, which has been able to deliver consistent stable returns over time. The CICI Money Market Fund primarily invests in government securities, bank deposits and high-quality corporate debt instruments to their steller returns.
The objective of the CIC Money Market Fund is to preserve capital whilst achieving long-term capital growth, stability, and minimal risk and offering a short-term investment option for surplus funds in times of market volatility.
CIC Money Market Fund highlights:
- Launch Date: Jun 2011
- Fund Manager: CIC Asset Management Ltd
- Benchmark: Average 91-day T-Bill
- Effective Annual Rate: 8.8%
- Annual Management Fees: 2% pa
- Minimum Investment: KES 5,000
- Minimum Top-up: KES 1,000
- Initial Fee: Nill
- Redemption Fee: Nil
- Trustee: Kenya Commercial Bank
- Custodian: Co-op Custodial Services
- Auditor: PWC
- Risk Profile: Low
Learn more: How to Lose Money While Your Portfolio Rises in Value
6. Britam Money Market Fund – EAR 9.3%
The Britam Money Market Fund invests in short-term fixed-income securities such as treasury bills and bonds, commercial paper and bank deposits; to provide investors with both liquidity and minimize risk exposure. The fund has a history of delivering reliable consistent returns over time that further underscores its status as a dependable choice for investors.
The objective of the Britam Money Market fund is to provide investors with competitive returns and preservation of capital in the short term.
Here are some additional details about the Britam Money Market Fund:
- Fund Manager: Britam Asset Managers (K) Ltd
- Effective Annual Rate: 8-10%
- Annual Management Fees: 1.5% pa
- Minimum Investment: KES 1,000
- Minimum Top-up: KES 1,000
- Initial Fee: Nill
- Redemption Fee: Nil
- Trustee: KCB Bank Kenya Ltd
- Custodian: Standard Chartered Bank
- Auditor: Deloitte & Touché
- Risk Profile: Low
7. Nabo Capital Money Market Fund – EAR 9.2%
The Nabo Capital Money Market Fund is available in both Kenyan Shillings and United States Dollars. The fund invests the KES-denominated fund in sovereign and corporate short-term debt securities, certificates of depots and bank deposits. The fund offers high returns at low risk and ease of access when needed within 48 hours.
The objective of the Nabo Capital Money Market Fund seeks to “maximize current income by investing primarily in a diversified portfolio of short-term debt securities whiles aiming to preserve capital and maintain a high degree of liquidity.”
- Launch Date: Nov 2017 (USD Fund, Aug 2014)
- Fund Size: KES 1.13 B (USD Fund, USD 1M+)
- Fund Manager: Nabo Capital LTD
- Benchmark: Average 91-day T-Bill (USD Fund, LIBOR USD 1 Month + 1%)
- Effective Annual Rate: 9.2% (USD Fund, 3.4%)
- Annual Management Fees: Up to 2.25%
- Minimum Investment: KES 1,000,000 (USD Fund, USD 10,000)
- Minimum Top-up: KES 10,000 (USD Fund, USD 1,000)
- Initial Fee: Nill
- Redemption Fee: Nil
- Trustee: KCB Bank Kenya Ltd
- Custodian: Stanbic Bank
- Auditor: Grant Thornton
- Risk Profile: Low
8. ICEA Lion Money Market Fund – EAR 9%
ICEA Lion Money Market Fund (managed by ICEA Lion Asset Management, a subsidiary of ICEA Lion Group) is a low-risk investment that offers investors the chance to earn consistent returns. The fund invests in a diversified portfolio of high-quality money markets instruments such as Treasury bills, Treasury bonds, Corporate bonds, bank deposits and cash. With its good track record, the fund has been able to offer investors with both short-term and long-term investment horizons, consistent returns with minimal risk.
The objective of the ICEA Lion Money Market Fund is to “achieve optimal returns while preserving capital”.
Here is the ICEA Lion Money Market Fund fact sheet (KES/USD):
- Launch Date: Nov 2007
- Fund Size: KES 14B
- Fund Manager: ICEA Lion Asset Management
- Benchmark: Average 91-day T-Bill
- Effective Annual Rate: 9%
- Annual Management Fees: 2% pa
- Minimum Investment: KES 500
- Minimum Top-up: No Limit
- Initial Fee: Nill
- Redemption Fee: Nil
- Trustee: KCB Bank Kenya Ltd
- Custodian: Standard Chartered Bank
- Auditor: Deloitte
- Risk Profile: Low
A Few Things to Keep In Mind
When choosing to make any investment, it is important to consider the following:
A. Your personal investment goals and your individual risk tolerance. Do they align with the fund’s investment objectives? Consider what type of investments the fund makes. Are they well within your risk profile? If you are looking for high-return investment, money market funds are not it. But, choose a fund with lower returns and low risk for a more conservative, consistent return.
B. Management fees charged by different money market funds. Fees will eat into your returns, it is important to strike a good balance when choosing a good fund and low fees.
C. Historical fund performance or track record. How has the fund performed in the past? Always consider how the fund has performed in the past. Though not a guarantee of future performance, it is a good indicator that it is likely to continue to perform well in the future.
D. Fund managers’ experience. Does the fund have experienced managers? Experience managers are less likely to make rocky mistakes with your money and therefore, are able to provide those consistent, stable returns you are seeking.
Learn More: How to Make Money From Treasury Bills
Final Thoughts
There you have it! The best money market funds in Kenya.
All in all performance, liquidity and reputation with a demonstrated ability to provide stability, attractive yields and effective risk management are all factors to consider when determining the fund you should invest in. The funds mentioned above may not be 100% but over time, they have proven themselves making their way to being one of the best money market funds in Kenya today.
However, it is always advisable to conduct your own research and make well-informed decisions that align with your investment goals and risk appetite. Do a thorough review of the funds you seek to invest in and consult with a financial advisor before making any investment decisions.
Happy investing!
Image Credits: Top by Joslyn Pickens via Pexels