Like all the other Money Market Funds (MMFs) in Kenya and in the world, Kuza Money Market Fund is an open-end mutual fund that invests in short-term money-market instruments with low credit risk;
In investments like money market funds, ‘Open-end’ is a term used to refer to an investment scheme that allows investors to buy and redeem units at any time while ‘Mutual fund’ means a company or a firm that pools money from multiple investors and invests the money in stocks, bonds and other debt securities, as well as precious metals such as gold and silver.
As an open-ended fund, Kuza Money Market Fund has unlimited shares available to sell to meet investor demand at request, offering flexibility and liquidity. However, but with respect to that, as specifically a mutual fund of money market fund type, it does not invest in precious metals because they do not make interest or dividend payments.
> Top 10 Best Money Market Funds in Kenya 2024
So what does Kuza Money Market Fund invest in?
Instead, in line with its objective of providing a safe and stable investment option with an attractive rate of income to the extent consistent with the preservation of capital for money investors may need to access in the short term, the MMF invests in highly liquid, near-term instruments like commercial papers, certificates of deposit, Treasury bills, and repos collateralized by such securities.
Precisely, Kuza Money Market Fund seeks to achieve its investment objective by investing in high-quality short-term money market instruments denominated in Kenyan Shilling. These include but are not limited to call and fixed deposits, Treasury bills and bonds issued by the Government of Kenya, corporate bonds and collective investment schemes.
Unlike hard assets and closed-end funds which are traded on stock exchanges, money market instruments are more flexible with no managed distribution policy when it comes to buying and selling units and are more secure because if short-term interest rates rise, the cost of leverage for closed-end funds is likely to increase and reduce the returns earned by the fund’s common shareholders.
What is the interest rate of Kuza MMF in 2024?
Kuza Money Market account — Earn 17.02% APY while making unlimited transfers and withdrawals. However, note that Kuza Money Market Fund has a lock-in period of 2 weeks, the time frame for which investments cannot be withdrawn or redeemed to promote long-term investing and maintain market stability.
Below is a history of its effective rate of return on investments recorded on diverse dates in the months of 2024:
| Month in 2024 | Kuza MMF rate |
| January | 14.98% |
| February | 15.71% |
| March | 16.25% |
| April | 16.33% |
| May | 17.52% |
| June | 17.26% |
| July | 17.81% |
| August | 17.30% |
| September | 17.02% |
With the interest rates dropping and rising and rising then dropping, please know that yields of money market funds respond to changes in monetary policy rates, especially the commercial lending rates set by the Central Bank of Kenya (CBK), short-term interest rates, inflation and other cyclical economic factors.
That said, past performance is not a reliable indicator of future results.
What is the minimum investment of Kuza Money Market Fund?
Even though there is no minimum balance requirement in a Kuza Money Market Fund account, it has a minimum initial investment amount of Ksh5,000 to kick start your journey in MMF investing.
There is also a minimum top-up amount, which is Ksh1,000, and the Fund has an annual administrative fee of 2%.
Kuza Money Market Fund was started in December 2022 by Kuza Asset Management, its fund manager. Respectively, the custodian and the trustee of the Fund are KCB Bank and Co-operative Bank of Kenya, which are among the biggest banks in the country.
