Money Market Funds (MMFs) have, over the years, emerged as a leading option for millions of Kenyans seeking to diversify their investment portfolios. They are safer and low-risk because they invest in highly liquid securities like cash equivalents, government securities, and highly-rated debt-based securities.
Kenyans have also pivoted towards MMFs because they also offer relatively higher returns than traditional savings accounts. For example, the average returns for MMFs is 8.9 per cent, while the average returns on bank deposits is 6.4%.
The growth of MMFs in the country can be largely attributed to the digitization of financial products, making investing more convenient and accessible and thus attracting a larger investor base.
This has been further bolstered by multiple entities accepting investments of as little as Ksh100 while offering instant withdrawal options.
What is a Money Market Fund (MMF)?
A Money Market Fund (MMF) is a Unit Trust Fund (UTF) managed by a professional fund manager and invested in various asset classes such as commercial papers, Treasury bills, Treasury bonds, and fixed deposits.
What to Consider
Investing in money market funds can be an effective strategy for those looking to preserve capital while earning moderate returns. Each of these funds presents unique features tailored for different investor needs, whether they prioritize higher returns, liquidity, or risk management.
It is advisable for potential investors to consult with financial advisors and consider their financial goals, risk tolerance, and the specific characteristics of each fund before making investment decisions.
Additionally, reviewing updated performance data and fund reports will help ensure that the chosen fund aligns with current market conditions.
- Past performance of the fund: You should focus on the average returns of the MMF. CMA requires the MMFs to post their daily returns on the local newspapers, which can be a great source to track the daily returns of the fund managers to help you make proper investment decisions. It is important to also assess the diversification of a fund’s investments to better understand the portfolio.
- Minimum Investment: You should know the minimum amount you require to open an account with the company for you to begin investing. Most MMFs have a low minimum investment amount (as low as Kshs 1,000), which is affordable by many people in the country.
- Consistency: Try to look for consistency in the returns of general market funds, as this will help identify a stable source of income.
Top Money Market Funds (MMFs) in Kenya
- Etica Capital Limited MMF
Etical Capital MMF is among the best money market funds in Kenya, with a daily average yield of over 16 per cent.
The fund offers the best possible platform for investors beginning their MMF journey, allowing an initial deposit of as low as Ksh100 and subsequent deposits, equally of Ksh100.
Other features of Etica Capital MMF include;
- No Lock-in period
- High liquidity of funds
- No initial fees
- Daily compounding of interests, which is credited to client accounts. Investors are able to see their money grow on a daily basis.
2. Cytonn Money Market Fund (MMF)
Cytonn Money Market Fund (CMMF) is a product of Cytonn Asset Managers Limited (CAML), the regulated affiliate of Cytonn Investments Management Plc.
CMMF invests in high-quality interest-bearing investments, fixed deposits, and near cash holdings in the Kenyan market.
Some of the standout features of CMMF include;
- No entry or exit fee is charged.
- Interest earned is compounded on a daily basis.
- Capital remains safe.
- Clients get competitive rates based on the market.
3. Lofty Corban Money Market Fund (MMF)
Lofty Corban MMF is a product of Lofty-Corban Investments Limited (L-CIL), a leading Kenyan investment management firm specialising in managing collective investment schemes and pension funds.
The MMF is among the best performing in the country with an average effective daily yield of over 16 per cent.
Key features of Lofty-Corban KSH MMF are:
- Low minimum investment: you can invest as little as KES 1000
- Accessibility: funds are accessible at short notice
- Capital preservation: no loss of money invested
- Compounding: earn interest on interest
- The fund invests in interest-bearing instruments, including bank deposits, Treasury bills, and commercial papers
4. Madison Money Market Fund (MMF)
Madison Money Market Fund focuses on capital protection and growth through diversification of securities and offering high returns while meeting client liquidity needs.
The fund invests in high-quality, short-term money market instruments, including bank deposits, government securities, and corporate instruments, in compliance with CMA guidelines for collective investment schemes.
The fund is suitable for salaried individuals, professionals, entrepreneurs, SACCOs, learning institutions, NGOs, churches, law firms, and SMEs, catering to needs like:
- Emergency funds and school fees funds
- Short-term savings goals
- Property and construction funds
- Group and welfare investments
- Business cash flow management
Key features of Madison MMF include;
- No entry or exit fee
- No tenor restrictions
- Withdrawals processed in T+1 working day
- Monthly interest distribution
- Initial minimum investment: Kes 5,000 and Minimum top-up: Kes 1,000
5. KCB Money Market Fund (MMF)
KCB Money Market Fund is among the very best in the country and boasts an annual yield rate of over 14 per cent.
This particular fund offers confidence to investors seeking a well-managed and profitable MMF to stake their money.
Some of the key features of KCB MMF include;
- Minimum Initial Investment: You can start your investment journey with as little as KES 5,000.
- High level of liquidity
- Safety of initial capital
- Funds are invested in low-risk interest-yielding assets like bank deposits, T-bills and T-bonds.
6. Apollo Money Market Fund (MMF)
This fund invests in low-risk investments with an element of guaranteed returns, such as fixed deposits, Treasury bills, commercial paper, government bonds, and corporate bonds. The fund is for investors looking for a safe parking place for their funds and with a low-risk appetite
The minimum lump sum investment is Ksh1,000, and additional top-ups of Ksh1,000 can be made thereafter. Regular voluntary top-ups can be made by cheque, direct cash deposit, direct debit order, or standing order.
7. Kuza Money Market Fund (MMF)
Kuza Money Market Fund is a product of Kuza Asset Management Limited and is among the best performing MMFs in the country with an average effective daily yield of over 15 per cent.
Kuza MMF is designed with low-risk, short-term-oriented investors in mind to provide them with an inflation-beating return with minimum risk exposure.
The fund invests in short-term KES-denominated interest-bearing securities, which include:
- Bank calls and fixed deposits.
- Treasury bills issued by the Government of Kenya.
- Short-term Treasury bonds issued by the Government of Kenya.
- Corporate bonds.
- Commercial paper.
- Collective Investment Schemes.
Key features of Kuza MMF include;
- Preservation of capital.
- Passive Income creation.
- High Liquidity.
- Minimum initial investment amount of Ksh1,000 and a minimum top-up amount of Ksh1,000.
8. GenAfrica Money Market Fund (MMF)
GenAfrica Money Market Fund (MMF) is suitable for a low-risk investor interested in capital preservation, ease of liquidity, and monthly income generated from interest income by the fund.
Funds deposited into the money market fund are invested mainly in interest-bearing assets such as fixed deposits, Treasury bills, and short-term bonds. The investment strategy aims at securing interest above local bank rates while ensuring the client’s capital is secured.
Key features of the GenAfrica MMF include:
- No initial fees
- There are no limitations on withdrawal
- Monthly statement updates via email
- Easy sign-up and top-up via the GenAfrica Unit Trust portal
9. Jubilee Money Market Fund (MMF)
Jubilee Money Market Fund boasts an average effective daily yield of over 14 per cent.
Key features of the Jubilee MMF include:
- Safety of initial capital.
- Monthly compounded interests.
- High liquidity
10. Co-op Money Market Fund (MMF)
For investors seeking high returns, the Co-op Money Market Fund remains a top contender, delivering an average daily yield of over 14 per cent.
The minimum initial investment to begin your investment journey in the fund is KES 2,000, with no limit on subsequent top-ups.
More features of Co-op MMF include:
- Access your money within 2–3 business days
- Allows M-pesa deposits
- Management fees of 0.9%
- Funds are invested in T-bills, corporate notes, bank fixed deposits, and bank call deposits.
