Capital Markets Authority (CMA) has warned managers of fast-growing Special Funds against unethical marketing, including advertising of high returns without providing investors with sufficient information and disclosures, which often masks significant risks.
CMA is reported to have already held closed-door meetings with managers of these Special Funds, amid the mushrooming of this category of collective funds, with some players even irregularly hiring influencers to hype up the investment option.
Available data shows that special funds accounted for a record 23.9% share of Collective Investment Schemes as at end of March 2026, with some KSh 203.5 billion packed into them
A Special Fund invests according to the asset manager’s strategy and is unconstrained, featuring allocations to listed equities, real estate, private equity, offshore stocks and commodities, based on opportunity sets. The structure allows fund managers to concentrate on selected asset classes, including high-risk instruments that generate market beating returns but also expose clients to potentially significant losses.
CMA is issuing the alert when some of the some successful and profitable funds such as Mansa X and Etica is posting impressive returns to clients. While this alert from CMA, it is feared, could trigger panic withdrawals from some of these special funds, there is also an agreement that CMA could be issuing a subtle warning. Special funds with negative liquidity and strange overseas investments continue to entice novices and not so sophisticated retail investors. What happened with Cytonn is still fresh in the memory of many an investor.
“The CMA Action should not necessarily be interpreted as a negative signal for special funds. Rather, they reflect the regulator’s intention to ensure that investors understand both the return potential and associated risks before investing. As the segment matures, stronger regulation is likely to enhance transparency, improve investor confidence and support the industry’s long-term sustainability,” said CFA Dedan Maina, Ketu Capital.
According to the latest data from CMA, In the quarter ended December 2025, the total assets under management by the Collective Investment Schemes amounted to KSh756.2 billion, representing a 11 percent increase from KSh 679.6 billion reported in the quarter ended September 2025.
The top 10 Collective Investment Schemes, as at December 2025, are led by Sanlam Unit Trust Scheme with assets worth KSh144,310,234,841 and market share of 19.08%, followed by Standard Investment Trust Fund with assets worth KSh 125,314,716,090 and market share of 16.57%, CIC Unit Trust Scheme with KSh 102,043, and market share of 13.49%, Britam Unit Trust Scheme with KSh 53,099,994,031 and market share of7.02%, NCBA Unit Trust Scheme with KSh 52,350,284,304 in assets and 6.92% market share,Old Mutual Unit Trust Scheme KSh 30,608,803,720 and 4.05% market share, Absa Unit Trust Funds worth KSh 29,082,256,518 and 3.85% market share; Coop Unit Trust Scheme KSh 24,255,119,346 and 3.21% market share, ICEA Unit Trust Scheme KSh 22,914,229,748 in assets and 3.03% market share and Jubilee Unit Trust Scheme worth KSh 21,732,595,728 in December 2025 with 2.87% market share.
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