Money Market Funds

Money Market Funds (MMFs) are investment vehicles that offer individuals and businesses in Kenya a safe and liquid way to invest in short-term debt instruments. These funds are designed to provide capital preservation while generating stable returns, making them an attractive option for both new and seasoned investors.

Key Features

1. Low Risk Investment
   • MMFs primarily invest in high-quality, short-term debt securities such as government treasury bills, corporate bonds, and fixed deposits.
   • Considered low-risk compared to other investment options, they aim to provide returns close to the risk-free rate.
2. Stable Returns
   • Investors can expect competitive yields, which are typically higher than traditional savings accounts.
   • For example, the Stanbic Money Market Fund currently offers an annual return yield of approximately 14.35%, although yields may fluctuate based on market conditions.
3. Liquidity
   • Money Market Funds allow investors to withdraw their funds with minimal notice, usually without penalty fees.
   • The redemption process is straightforward, often facilitated through mobile banking or online platforms.
4. Professional Management
   • Funds are managed by experienced professionals who actively monitor market conditions and adjust the portfolio to optimize returns.
   • Investors benefit from the expertise of fund managers without needing to manage their investments directly.
5. Minimum Investment Requirements
   • Many MMFs have accessible minimum investment thresholds, often starting around KES 5,000.
   • Additional investments can typically be made in increments as low as KES 1,000.
6. Monthly Distributions
   • Interest earned is calculated daily and credited to investors’ accounts at the end of each month, providing a regular income stream.

Pricing Plans

• Basic investment in a money market fund starts from approximately KES 5,000.
• Investors can choose to make additional contributions starting from KES 1,000, allowing for flexibility in investment amounts.

Insurers and Fund Managers Offering Money Market Funds

Several reputable institutions in Kenya offer Money Market Funds:

• CIC Insurance Group
• Britam
• Madison Insurance
• ICEA Lion Group