Overview of the Money Market Fund in Kenya
In this blog, we will look at what Money Market Fund is, and how to invest in this product.
Fund Managers
A Fund Manager is a financial institution licensed by the Capital Markets Authority to collect deposits from the general public for investing. The deposits are put into collective funds called Mutual Funds or Unit Trust Funds and invested in diverse investment products. As of March 2024, there are 41 Fund Managers in Kenya.
Mutual Funds
There are 5 main types of Mutual Funds based on where the fund is invested;
1. Equity Fund – Fund invested in stock markets
2. Bond Fund – Fund invested in Corporate Bonds and Treasury Bonds
3. Money Market Fund – Fund invested in Treasury Bills, Commercial Papers and Bank Deposits
4. Balanced Fund – Fund invested in any investment product at the discretion of the fund manager
5. Real Estate Investment Trust – Fund invested in real estate
Money Market Fund
The Money Market Fund is the most popular Mutual Fund in Kenya. It accounts for over 70% of all the funds under mutual funds. This is mainly because it is risk-free and has performed relatively well over the years – as compared to other funds.
Features of Money Market Fund
| FEATURE | DESCRIPTION |
| Minimum Investment | Depends on the Fund Manager -Example Zimele Ksh 100.00 Britam Ksh 1,000.00 Sanlam Ksh 2,500.00 CIC Asset Ksh 5,000.00 |
| Risk Level | Low – Since the fund is invested in guaranteed return products like the Treasury Bill, the money that you invest is protected (cannot be reduced in amount). |
| Returns | Conservative – The returns from the Money Market Funds range from 6% to 10% depending on the Fund Manager. |
| Terms | The Money Market Fund is Open-Ended. This means that you can withdraw and deposit funds at any time. Most Fund Managers request 3-5 days from the time of request of withdrawal to receipt of funds to process and transfer funds to your bank account. |
| Other Characteristics of Money Market Fund | - Withholding Tax Levied at 15% of interest earned. - Interest is calculated daily and credited back to your account for re-investing. - Most fund managers provide a Mobile App to enable you to track the performance of your investment. |
Average Journey of Kshs. 10,000 invested in a Money Market Fund.
Major Fund Managers Providing Money Market Fund
See below the key players in the Money Market mutual fund and their market share;
| Company | Funds Managed(Bn) | Market Share | |
| 1 | CIC | 61.3 | 38.10% |
| 2 | NCBA | 27.7 | 16.90% |
| 3 | Sanlam | 17 | 10.30% |
| 4 | ICEA Lion | 14.6 | 8.9% |
| 5 | Britam | 13.2 | 8% |
| 6 | Old Mutual | 8 | 5% |
| 7 | Dry Associates | 4.5 | 2.7% |
| 8 | Coop Unit Trust | 4 | 2.4% |
Performance of Money Market Fund with Major Fund Managers
Below is a graph that shows the performance of the major Fund Managers over the past 7 years.
How to Invest in a Money Market Fund
Rubiani Wealth Management Ltd. is an Investment Agent with the following Fund Managers in Kenya;
- Britam Asset Managers Ltd
- Sanlam Investments East Africa
- CIC Asset Management Ltd
- ICEA LION Asset Management
If you would like to open a Money Market account with any of these Fund Managers, kindly reply to this email and we will assist you to do so. Opening the account is free of charge.
You may also revert with comments or enquiry by writing to us at invest@rubianiwealth.com