As individuals seek reliable and flexible avenues to grow their savings in Kenya, Money Market Funds (MMFs) have emerged as an enticing investment option.
In contrast to conventional savings accounts offered by banks, MMFs in Kenya provide a unique blend of superior returns and liquidity.
Money Market Funds offer a distinctive proposition, aligning higher returns with liquidity, making them a preferred choice for short-term investments in Kenya.
By delivering interest rates that outpace annual inflation rates, MMFs empower investors to witness accelerated growth in their savings.
There are many money market funds you can invest in.
However, it can be overwhelming to choose the most suitable MMF depending on your needs.
And to help you, I’ve done research and come up with the 11 best money market funds you can invest in.
Keep reading!
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Top 11 Money Market Funds You Can Invest In
Money market funds offer a secure avenue for investors seeking stability and liquidity in their portfolios.
Here are the 11 best money market funds carefully curated to provide optimal returns while preserving capital.
1. Cytonn Money Market Fund
Performance: 10.6%
Min. Investment: 1,000
Min. Top-up: 1,000
The Cytonn Money Market Fund emerges as a standout performer with a remarkable 10.6% return.
This fund’s strategic focus on short-term debt securities caters to investors with a low-risk appetite, placing a premium on stability and the security of invested capital.
Notable features such as zero entry fees, daily compounding of interest, and an intuitive online portal for easy account management contribute to the overall appeal of the Cytonn Money Market Fund.
2. Zimele Money Market Fund
Performance: 9.9%
Min. Investment: 100
Min. Top-up: 100
With a commendable performance rate of 9.9%, the Zimele Money Market Fund, also known as the Savings Plan, offers a compelling alternative to traditional savings accounts.
The fund’s accessibility is underscored by a low minimum investment requirement of KES 100, allowing investors to enter the market with minimal financial commitment.
The flexibility in deposit frequency and the convenience of MPESA deposits further enhance its appeal, making it an attractive option for investors seeking versatility and potential returns.
3. Sanlam Money Market Fund
Performance: 9.6%
Min. Investment: 2,500
Min. Top-up: 1,000
Positioning itself as a low-risk investment, the Sanlam Money Market Fund boasts a 9.6% performance rate. The fund’s minimum initial investment of KES 2,500 makes it accessible to a wide range of investors.
Strategic investments in high-quality interest-bearing assets, coupled with daily compounding of interest, offer stability and reasonable returns.
While withdrawals may take three working days, the fund’s flexible top-up options contribute to its overall convenience.
4. Apollo Money Market Fund
Performance: 9.4%
Min. Investment: 1,000
Min. Top-up: 1,000
Managed by APA Insurance, the Apollo Money Market Fund offers a low-risk avenue for investors, demonstrating a performance rate of 9.4%.
Despite lacking clear MPESA deposit options, the fund’s minimum investment requirement of KES 1,000 and various top-up methods make it an appealing choice for conservative investors seeking stable returns.
While specifics about the withdrawal process require clarification, the fund still provides a viable option for those prioritizing low-risk instruments.
5. Madison Money Market Fund
Performance: 9.3%
Min. Investment: 5,000
Min. Top-up: 1,000
Featuring a performance rate of 9.3%, the Madison Money Market Fund stands out with a slightly higher minimum investment requirement of KES 5,000.
The absence of entry and exit fees enhances the overall returns earned by investors. Monthly compounding of interest and a swift withdrawal process within 2-3 working days contribute to the fund’s attractiveness.
Additionally, the provision of free monthly statements fosters transparency and facilitates easy tracking of investments.
6. CIC Money Market Fund
Performance: 9.0%
Min. Investment: 5,000
Min. Top-up: 1,000
As one of Kenya’s premier MMFs, the CIC Money Market Fund boasts a performance rate of 9.0%. Its commitment to the safety of capital sets it apart, with prudent investments in secure financial instruments.
The daily interest calculation approach ensures frequent compounding, maximizing the potential for returns over time.
While the sign-up process may take a few days, the fund distinguishes itself by waiving initial joining fees, allowing investors to embark on their investment journey without incurring additional costs.
7. Old Mutual Money Market Fund
Performance: 10.5%
Min. Investment: 1000
Min. Top-up: 1,000
Old Mutual Money Market Fund offers investors a compelling daily yield of 10.50%. Esteemed in the financial industry, Old Mutual consistently delivers reliable results.
New investors are welcomed with an initial investment requirement of KES 1,000, coupled with a minimum subsequent top-up of KES 1,000.
This fund stands out for its quick and convenient mobile sign-up process, accessible by dialing *480#. With a focus on capital stability, Old Mutual MMF ensures returns without penalties, providing investors with easy liquidity.
Another notable feature is the freedom to switch investments seamlessly between different funds. The fund strategically allocates investments in a diversified portfolio, including T-bills, corporate notes, bank fixed deposits, and bank call deposits, enhancing its appeal for those seeking stability and consistent returns.
8. Kuza Money Market Fund
Performance: 10.45%
Min. Investment: 5000
Min. Top-up: 1000
Kuza Money Market Fund narrowly is another great MMF you can invest in. For new investors, an initial minimum investment of KES 5,000 is required, accompanied by subsequent top-ups set at KES 1,000.
The Kuza MMF distinguishes itself with features such as high liquidity and a commitment to capital preservation. Notably, the fund strategically invests in short-term KES-dominated interest-bearing securities, including T-bills, corporate bonds, commercial paper, and bank call and fixed deposits.
These features collectively enhance its appeal to investors seeking a balance of returns and security, making Kuza MMF a compelling choice just outside the top 10 rankings in the competitive landscape of money market funds.
9. Nabo Money Market Fund
Performance: 10.23%
Min. Investment: 100000
Min. Top-up: 10000
Nabo Money Market Fund from Nabo Capital presents an enticing investment opportunity. To embark on this venture, investors are required to make an initial minimum investment of KES 100,000, with subsequent top-ups set at KES 10,000.
This fund distinguishes itself with a fee structure that includes zero initial and redemption fees, offering a cost-effective entry and exit for investors.
The investment period of at least 3 months is designed to optimize returns, enhancing the fund’s appeal. Noteworthy features also include high liquidity, daily interest accrual, and monthly compounding, contributing to the overall attractiveness of the Nabo Money Market Fund.
The fund strategically allocates funds to short-term debt securities and instruments, providing investors with a balanced approach to potential returns and security within the competitive landscape of money market funds.
10. Jubilee Money Market Fund
Performance: 10.75%
Min. Investment: 1000
Min. Top-up: 1000
Jubilee Money Market Fund maintains its standing with a commendable average daily yield of 10.75%. This fund offers key features that enhance its appeal to investors, including high liquidity for easy access to funds, ensuring financial flexibility.
Additionally, the Jubilee MMF prioritizes the safety of the initial capital, providing investors with confidence in the security of their investments.
Another notable advantage is the monthly compounding of interests, contributing to the overall growth potential of the fund.
With these features, the Jubilee Money Market Fund solidifies its position as a reliable and attractive option within the competitive landscape of money market funds.
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11. GenAfrica Money Market Fund
Performance: 10.77%
Min. Investment: 1000
Min. Top-up: 1000
GenAfrica Money Market Fund exhibits a noteworthy average daily yield of 10.77%, showcasing an improvement since June.
Setting itself apart with investor-friendly features, this fund stands out for its absence of initial fees, eliminating entry barriers for investors.
Moreover, GenAfrica MMF offers the flexibility of unlimited withdrawals, providing investors with convenient access to their funds.
The added convenience extends to monthly statement updates delivered via email, ensuring transparency and easy tracking of investments.
The GenAfrica Unit Trust portal facilitates a hassle-free sign-up and top-up process, enhancing the overall accessibility and user experience for investors in this competitive landscape of money market funds.
Factors to Consider Before Investing in an MMF
Investing in a money market fund demands careful consideration of various factors to ensure a balance between stability, liquidity, and returns.
Before making financial decisions, it’s essential to delve into key aspects that can influence the performance and safety of your investment.
Here, we outline crucial factors to guide your evaluation process and aid in making informed choices when selecting a money market fund.
1. Expense Ratios
Before investing in a money market fund, scrutinize expense ratios. These fees impact returns, so opt for funds with lower ratios.
A low expense ratio ensures a larger portion of your investment contributes to returns, enhancing overall profitability.
2. Credit Quality
Assess the fund’s credit quality by examining the types of securities it holds. Higher-rated instruments indicate lower risk.
A strong credit quality safeguards your investment against default risks, providing stability and preserving capital in varying market conditions.
3. Liquidity
Evaluate the fund’s liquidity, as it directly influences your ability to access funds. Opt for funds with high liquidity, allowing easy and timely withdrawals.
A liquid money market fund ensures you can efficiently manage your cash flow and respond to financial needs promptly.
4. Yield
Consider the fund’s yield, but balance it with risk. A higher yield often accompanies higher risk. Striking the right balance ensures you optimize returns while maintaining an acceptable level of risk for your investment objectives.
5. Fund Size
The fund size matters, as it can impact the fund’s efficiency and transaction costs. Larger funds might enjoy economies of scale, potentially resulting in lower expense ratios.
However, excessively large funds may face challenges in deploying capital efficiently.
6. Regulatory Environment
Stay informed about the regulatory environment governing money market funds. Changes in regulations can impact fund structures and risk profiles.
Being aware of regulatory shifts helps you adapt your investment strategy to align with evolving market conditions.
7. Management Team
Evaluate the experience and track record of the fund’s management team.
A skilled and experienced team is better equipped to navigate market uncertainties, make informed investment decisions, and effectively manage the fund’s portfolio.
8. Historical Performance
Review the fund’s historical performance to gauge its consistency and ability to meet investment objectives.
While past performance doesn’t guarantee future results, it provides valuable insights into the fund’s track record and its ability to weather different market conditions.
9. Distribution Method
Understand the fund’s distribution method, whether it’s accruing or distributing interest income. This choice can have tax implications.
Accruing interest may result in lower current tax obligations while distributing interest can lead to immediate tax consequences.
10. Diversification
Assess the fund’s diversification strategy. A well-diversified money market fund spreads its investments across various securities, reducing concentration risk. Diversification enhances the fund’s resilience against the potential default of a single issuer.
11. Redemption Policies
Familiarize yourself with the fund’s redemption policies, including any fees or restrictions associated with early withdrawals.
A clear understanding of redemption terms helps you plan for potential liquidity needs and avoids any unexpected financial implications.
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Final Thoughts
Money market funds provide a secure haven for investors, balancing stability and returns. They offer a diverse range of choices, each with its unique advantages.
Hopefully, the above list of 11 best money market funds will help you choose the one that aligns with your financial goals.
Remember to thoroughly assess factors like expense ratios, credit quality, and liquidity before deciding. Invest wisely, considering your risk tolerance and objectives.
Choose one of the above money market funds, and rest assured as you embark on a path of financial stability and prudent investment choices.
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