Overview of Kenya’s Money Market Funds in 2024
- Sanlam Money Market Fund – 14.20%
- Nabo Money Market Fund – 14.89%
- GenAfrica Money Market Fund – 14.80%
- Madison Money Market Fund – 14.50%
- Cytonn Money Market Fund – 14.49%
- Co-op Money Market Fund – 14.41%
- Genghis Money Market Fund – 14.37%
Money Market Funds (MMFs) in Kenya continue to be an attractive choice for investors seeking safety, liquidity, and consistent returns. These funds, typically low-risk, pool resources to invest in short-term instruments like Treasury bills, fixed deposits, and commercial papers. With the financial environment in Kenya evolving, 2024 has seen notable shifts in the performance of MMFs, driven by central bank policies and investor preferences.
Looking forward to 2025, identifying promising MMFs and emerging trends is crucial for optimizing returns. Knowclick Media dives into 2024’s top-performing MMFs, evaluates factors behind their performance, and highlights what to anticipate in 2025 to help you make informed financial decisions.
Top Money Market Funds in Kenya, 2024
Key Performers by Average Annual Yield (as of November 2024):
- Sanlam Money Market Fund
- Average yield: 14.20%
- Features: High liquidity, accessible investment options, and a focus on preserving capital.
- Nabo Money Market Fund
- Average yield: 14.89%
- Notable for its consistent growth and compounded monthly returns, this fund requires a minimum initial investment of KES 100,000.
- GenAfrica Money Market Fund
- Average yield: 14.80%
- Offers no initial fees and unrestricted withdrawals, making it an excellent choice for flexible investments.
- Madison Money Market Fund
- Average yield: 14.50%
- Minimum investment starts at KES 5,000, with additional top-ups of KES 1,000.
- Cytonn Money Market Fund
- Average yield: 14.49%
- Known for its low entry point (KES 1,000), daily compounded interest, and efficient withdrawal processes.
- Co-op Money Market Fund
- Average yield: 14.41%
- Features include M-Pesa integration for deposits and low management fees of 0.9%.
- Genghis Money Market Fund
- Average yield: 14.37%
- Offers short-term security-focused investments with impressive returns.
These MMFs stand out for their consistent returns, investor-friendly structures, and alignment with market conditions.
Factors Driving Performance in 2024
1. Government Securities Yields
MMFs primarily invest in government securities like Treasury bills, which offer low-risk, fixed-income returns. By late 2024:
- 91-day Treasury bill yields reached 15.74%.
- 182-day Treasury bill yields stood at 16.60%.
- 364-day Treasury bill yields were 16.81%
2. Inflation Rates
Moderate inflation levels in Kenya throughout 2024 have helped sustain returns, as fund managers balance income and capital preservation.
3. Regulatory Oversight
The Capital Markets Authority (CMA) ensures transparency and accountability in MMFs, enhancing investor confidence.
4. Economic Policies
Pro-growth monetary policies by the Central Bank of Kenya (CBK) have maintained an accommodative environment for MMFs.
5. Investor Behavior
Increased risk aversion and demand for liquidity have driven more investors toward MMFs in 2024, favoring their robust performance.
What to Expect from MMFs in 2025
1. Digital Integration
Expect more MMFs to integrate with mobile platforms like M-Pesa and Airtel Money, enabling seamless deposits and withdrawals. Funds like Co-op MMF have already embraced this trend.
2. Increased Competition
New funds with competitive rates and innovative features are likely to emerge. These may include options with lower management fees and faster withdrawal processing.
3. CBK Policies on Interest Rates
Any adjustment in CBK’s lending rates will directly influence MMF yields. For instance, an increase in benchmark rates may raise returns on Treasury bills, indirectly boosting MMF performance.
4. Sustainability-Focused Investments
As global ESG (Environmental, Social, and Governance) investing gains momentum, some MMFs may diversify into green bonds or ethical securities, appealing to conscious investors.
5. Tax Policy Changes
Potential tax reforms in 2025 may affect net returns for investors. Monitoring such policies will be critical for optimizing investment choices.
Key Considerations When Selecting an MMF
1. Historical Performance
Evaluate past returns to gauge consistency and resilience in different market conditions.
2. Management Fees
Lower fees result in higher net returns. Funds like Co-op MMF charge competitive fees of 0.9%, making them appealing.
3. Liquidity Options
Choose funds that allow unrestricted withdrawals, ensuring access to your capital when needed.
4. Entry Requirements
Some MMFs, like Cytonn MMF, offer a low entry barrier (KES 1,000), making them accessible to most investors.
5. Fund Manager Credibility
Reputation and experience of the fund manager play a significant role in ensuring security and returns.
Case Study: Sanlam Money Market Funds in 2024
Performance:
- Yield: 14.20%
- Investment mix: Primarily Treasury bills and corporate bonds.
Features:
- Minimum investment: KES 2,500.
- Monthly compounded returns, enhancing the power of reinvestment.
Investor Feedback:
- Highly rated for its transparent reporting and reliable customer service.
Trends and Predictions
- Increased Retail Participation
The accessibility of MMFs, coupled with Kenya’s growing middle class, is expected to drive higher participation from retail investors. - Regional Expansion
Leading MMFs may expand into East African markets like Uganda and Tanzania, leveraging economic integration. - Tech-Driven Analysis
Investors will increasingly rely on fintech platforms for real-time MMF comparisons and portfolio tracking.
Also Read: Emerging Trends in Real Estate 2025
Money Market Funds remain a stable and attractive investment option in Kenya, balancing risk and return effectively. The best performers in 2024, such as Nabo and Sanlam MMFs, highlight the sector’s resilience and strategic fund management. With emerging trends like digital integration and ESG investing, 2025 promises to bring exciting opportunities for informed investors.
To maximize your returns:
- Regularly review market updates.
- Use digital platforms to compare fund options.
- Monitor CBK policies and economic indicators.
By aligning your investments with market trends and leveraging the insights shared here, you can confidently navigate the dynamic MMF landscape in Kenya.
FAQs
Which MMF performed best in Kenya in 2024?
The Nabo Money Market Fund led with an average yield of 14.89%.
What should I consider before investing in an MMF?
Evaluate fees, liquidity, historical performance, and fund manager reputation.
Are MMFs safe?
Yes, MMFs invest in low-risk instruments like Treasury bills, prioritizing capital preservation.
Will MMF returns improve in 2025?
Returns will depend on CBK’s policies, inflation rates, and economic conditions.
How do I start investing in an MMF?
Research funds online, compare their features, and begin with the minimum investment requirement.
How are MMF returns calculated?
Returns are based on investments in T-bills, corporate bonds, and fixed deposits.
What trends will impact MMFs in 2025?
Digital access, sustainability, and CBK policies will shape performance.
