Money Market Funds in Kenya: Performance and Insights for
2024/25
During the 2024/25 financial year, money market funds in
Kenya generated strong returns, though the yields started to decrease as
interest rates dropped.
In the first quarter of 2025, top funds such as Cytonn and
Gulfcap posted impressive gross yields that went beyond 16 percent.
Funds like Kuza,
Etica, and Lofty-Corban also performed well, with average gross yields ranging
between 14 and 15 percent.
Yet, by mid-2025, the overall performance of these funds
began to slow down.
The average gross
yield across the entire industry fell to 10.3 percent, while net returns
settled around 8.7 percent. This decline was due to lower rates on Treasury
bills and broader changes in Kenya’s interest rate environment.
Even with the lower returns, money market funds still
performed better than traditional savings accounts and most fixed-income
products.
Gulfcap and Cytonn
continued to lead, with first-half 2025 gross averages of 14.2 percent and 14.0
percent respectively. Kuza also remained a top performer, reinforcing its
position among leading fund managers.
For investors, the benefits of money market funds were
clear.
They offered stable
returns, daily access to funds, and higher returns compared to short-term
Treasury bills, which had lower effective yields during the same period.
Dollar-denominated money market funds showed a different
picture.
The Etica USD and
Kuza USD Funds achieved steady gross returns of 5.9 percent and 5.8 percent in
the first half of 2025, resulting in net yields of around 5 percent. While
these returns were not as high as those of shilling-denominated funds, they
served as a helpful way for investors to manage risks related to currency
fluctuations during unstable times.
This pattern shows how closely the performance of money
market funds is tied to the overall economy.
As interest rates
declined and inflation eased, yields went down, but they stayed competitive.
The 2024/25 financial year showed that while these funds may experience changes
based on interest rate trends, they are still among the most dependable and
low-risk options for short- to medium-term money management.
For long-term success, investors should look for funds that
have a consistent history of reliability rather than chasing short-term high
returns.