News and Analysis
March 11, 2025
Money Market Funds (MMFs) are a popular choice for risk-averse investors seeking capital preservation and liquidity. Increasingly embraced by Kenyan investors, MMFs require minimal initial investments and offer quick access to funds, making them ideal for emergency savings and short-term goals.
February 2025’s MMF performance highlights some key trends, reflecting the ongoing economic shifts. The average daily effective rate declined to 11.93% per annum, down from 12.19% in January.
This downward trend mirrors falling Treasury Bill (T-bill) rates, which directly impact MMF yields as T-bills form a core part of these funds' portfolios due to their low-risk, short-term nature.
Read Also: What to Consider When Choosing an MMF
Despite the overall decline, some MMFs continued to stand out. The Gulfcap MMF topped the charts with a daily average return of 15.06%, closely followed by Cytonn at 15.05% and Lofty-Corban at 14.14%.
For dollar-denominated funds, Kuza MMF USD led with a 6.23% return, reflecting competitive returns for investors seeking foreign currency exposure.
Here’s a list of the Top 20 MMFs in Kenya for February 2025, based on their gross daily average return (The net returns may vary depending on management fees and taxes)
Read Also: Money Markets Funds in Kenya: Features and Key Considerations
Top 15 MMFs, Based on Net Returns
Read Also: How to Calculate Money Market Fund Returns
While returns are a key factor, choosing the right MMF involves more than just chasing high rates. It’s crucial to ensure your fund manager is licensed by the Capital Markets Authority (CMA) and operates under the oversight of a trustee and custodian bank.
MMFs diversify across various low-risk investments like T-bills, commercial papers, and fixed deposits.
Income from MMFs is subject to a 15% withholding tax, remitted to the Kenya Revenue Authority (KRA). As you plan your investments, factor in broader economic indicators like inflation rates, short-term interest rates, and the Central Bank Rate (CBR), as these can influence MMF performance.
MMFs remain a practical option for those looking for better interest rates than traditional savings accounts. To maximize returns, consider investing consistently and keeping a close eye on economic trends.
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