Today, there are several dollar-denominated funds available for investors with dollar cash flows who would like to continue earning dollar returns or investors who wish to diversify their Kenya shilling investments. These funds allow you to make the most of a stronger dollar and high-interest rate environment with these dollar fund investments.
Here’s a look at some options for the best dollar fund in Kenya for investors looking for stable income:
A. Fixed Income Fund
Fixed-income investments generally pay a fixed interest rate or dividend until maturity. These funds are suitable for conservative, income-oriented investors who want to diversify their investment portfolios. The fixed-income fund is particularly great for risk-averse investors with a short-term investment horizon.
1. NCBA Dollar Fixed Income Fund
Effective Annual Yield: 4.97%
The quoted rate is gross withholding tax and net of all expenses and is subject to 1% management fees per year. The fund seeks to preserve capital while generating regular interest income for unitholders by investing a combination of Eurobonds, USD fixed deposits, mutual funds, and other short-term interest-bearing assets. The fund is highly accessible, allowing daily withdrawals or investments of a minimum of USD 100.
2. Sanlam USD Fixed Income Fund
Effective Annual Yield: 6.6%
The effective annual yield is net of fees and gross of withholding tax. The Samliam USD Fixed Income Fund offers no fixed-period investment, as such, offering access at any time without loss of interest. The fund has an initial investment of USD 2500 and a minimum top-up of USD 500. The interest rate of the fund is compounded daily and monthly.
3. Nabo Capital Dollar Fixed Income Fund
Effective Annual Yield: 4.4%
The Nabo Fixed Income Fund (USD) aims to generate stable capital growth over the medium to long term while offering competitive returns on an annual basis. The fund invests in a mix of high-yield fixed-income sovereign and corporate bonds while balancing a sufficient level of liquidity.
B. Money Market Funds
Money market funds are a subclass of mutual funds designed to invest in highly liquid, fixed-income debt securities such as Treasury bills, commercial paper, and certificates of deposit. Compared to fixed-income funds, money market funds generally offer higher yields and are, however, not insured by the Kenya Deposit Insurance Corporation. They are particularly great for investors seeking relatively low-risk investments that offer a better return.
1. Dry Associates Money Market Fund
Effective Annual Yield: 4.8–5.11%
The Dry Associates Money Market Fund is ideal for individuals seeking liquidity and regular income. It offers a good alternative to traditional bank deposits, offering safety and income through a diversified portfolio of fixed-income securities. The minimum investment is USD 10,000, with a top-up amount of USD 1,000.
2. CIC Dollar Fund
Effective Annual Yield: 4.32%
The CIC Dollar Fund invests in government paper and liquid instruments such as Eurobonds, fixed deposits, demand deposits, and more. The fund offers competitive returns while providing capital preservation, stability, low risk, and diversification. The minimum investment is USD 1,000, and top-up amounts are USD 100.
3. Absa Dollar Money Market Fund
Effective Annual Yield: 3.44%
The Absa Dollar Money Market Fund aims to generate interest income from a wide range of US dollar-denominated short-term interest-bearing securities, such as fixed deposits.
4. Cytonn Money Market Fund (USD)
The Cytonn Money Market Fund (USD), invested in high-quality interest-bearing instruments, fixed deposits and cash equivalents in the Kenyan market to generate competitive returns for investors.
5. Standard Chartered Dollar Money Market Fund
Through the SC Mobile App, investors have access to a wide array of investment options, including a Dollar Money Market Fund. The fund invests in short-term, high-quality securities such as Treasury bills and Commercial paper. The minimum investment of the Fund is USD 100 and has a management fee of 0.25% per annum.
C. Growth Funds
1. Mansa X USD BY SIB
Effective Annual Yield: 8.71%
The Mansa X USD is a mixed-strategy fund that invests in the global market with the aim of capital growth. The fund invests across asset classes, notably in Eurobonds, German 10Y Bonds, Natural Gas, Gold, Taiwan Semiconductor Manufacturing Company, Microsoft Inc, Qualcomm Inc and more. The minimum investment is USD 2,500, and the minimum top-up is USD 1,000.
Related: What Are The Best Money Market Funds in Kenya?
Bottomline
With quite a number of dollar funds in Kenya, deciding which fund is right for you can be daunting. The current economic environment offers potential higher returns that can be made through dollar funds. The outlook is generally positive due to the strengthening dollar. With as little as a hundred dollars, you can take advantage of these gains and diversify your investments.
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