Money market funds are the surest way to invest your hard-earned money and get good returns every year in Kenya. But which are the best money market funds?
If you have been wondering where to invest, the money market fund is a suitable place to start investing. When choosing the best money market fund, consider the following factors:
Assets under management. The CIC Unit Trust Scheme has the highest Assets Under Management (KSh61.92 Bn), accounting for the largest market share at 27.5% of the total AUM.
Other top fund managers by Asset Under Management include NCBA, Britam, Sanlam, ICEA, and Old Mutual.
Management fee. Sanlam has the lowest management fee of 1.2%, compared to the industry average of 2%. A high management fee is detrimental for your investment because it eats into your returns.
Returns of at least 8% p.a. are good returns on your investment. High returns should not be critical when choosing a money market fund.
You don’t want to lose all your investment chasing high returns. Some money market funds may manipulate returns to attract new customers.
Deposit requirement. Another important factor is that the minimum investment deposit should fit your budget. You don’t want to put all of your money in a money market fund and end up with nothing. Zimelle has the lowest deposit requirement of Ksh 100.
Custodian. You should also consider the financial strength of the custodian who is managing the money market fund’s assets. Investors prefer and consider a money market fund with a Top Tier 1 bank as its custodian a safer investment. Co-op Bank serves as the custodian for the CIC unit trust.
Keep track of the trustee and fund manager’s records. Avoid fund managers or trustees that have been involved in unit trusts where Kenyans lost money and need consistent returns. Finally, the reputation of unit trusts is crucial when choosing a money market fund.
Money market funds are reliable methods for earning compound interest annually. You can access your money anytime.
