As stock prices grew slowly for the better part of the year, it looks like there was little troubling investors with cash stashed in collective investment schemes (CISs)—referring to all professionally managed investment funds that pool money from investors to buy financial securities like bonds, shares, and bank deposits.
Kenya’s Unit Trusts, a form of a collective investment scheme, has hit an all-time high, adding Ksh62.34 billion in the week ending Thursday to bring total assets to Ksh316.4 billion in the three months to September, up from Ksh254.06 billion in June, according to the Capital Markets Authority (CMA).
The increase was largest towards the end of September, with the vast majority of inflows, Ksh196.8 billion, or 62% of all assets under management (AUM), going into Money Market Funds (MMFs) that invest in low-risk, short-term debt instruments like bank deposits, repurchase agreements, Treasury Bills, and high-quality corporate commercial paper, among other near-cash holdings.
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In this unpromising investment atmosphere, it’s not surprising that cash has been flowing into the Money Market Funds at a record clip. Short‐term rates had been rising intermittently for months, and the rise made the MMFs more attractive to investors who want to keep their cash in a safe, highly liquid and profitable investment vehicle. The average net yield on the five largest funds between January and August was 16-17%, according to statistics from BT.
The other types of Unit Trusts remained significantly unchanged, with Fixed Income Funds valued at Ksh53.5 billion, Equity Funds at Ksh2.3 billion, Balanced Funds at Ksh1.3 billion, and other Funds at Ksh62.4 billion.
The CIC Unit Trust Scheme remained a leader by assets in the overall Unit Trust fund, holding 22.3% of the market share with assets totalling Ksh70.3 billion after increasing by 5.3% from Ksh66.8 billion in the second quarter of 2024. Sanlam Unit Trust was the second-largest collective investment scheme, with assets growing 25.4% to Ksh46.8 billion, maintaining a 14.8% market share.
Jubilee Unit Trust recorded the most significant growth in AUM, rising by 90.7% to Ksh5.1 billion in the three months to September 2024, up from Ksh2.7 billion in June. In contrast, MyXeno Unit Trust saw the largest decline, with AUM falling to Ksh13 billion in September from Ksh16.1 billion in March. NCBA Unit Trust, British American Unit Trust, and Zimele Unit Trust also reported mild declines of 0.3%, 2.6%, and 6.5%, respectively.
AUM in unit trusts has generally increased over recent years, partly due to new fund managers like the Standard Investment Bank’s Mansa X, a multi-asset fund that accounted for Ksh34.2 billion, or 54.8% of the total AUM in Unit Trusts over the three months.
Yesterday, the CMA approved the creation of four new funds by licensed asset management firms, including the Britam USD Money Market Fund, Orient Dollar Money Market Fund, and CIC Global Special Fund.
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