Money Market Funds are a popular way to invest in Kenya. But which are the best money market funds? A Thread!
If you have been wondering where to invest, money market fund is a good place to start investing. Here are factors to consider when choosing the best money market fund:
If you have been wondering where to invest, money market fund is a good place to start investing. Here are factors to consider when choosing the best money market fund:
1⃣Assets Under Management. The CIC Unit Trust Scheme has the highest Assets Under Management of 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.
Other top fund managers by Asset Under Management include NCBA, Britam, Sanlam, ICEA and Old Mutual.
2⃣ Management fee. Sanlam has the lowest management fee of 1.2% compared to the industry average management fee of 2%. A high management fee is not good for your investment because it will eat into your returns.
3⃣Returns 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.
4⃣ Deposit requirement. Another important factor is the minimum deposit required to invest should fit into your budget. You do not want to put all your money in a money market fund and be left with nothing. Zimelle has the lowest deposit requirement of Ksh 100.
5⃣Custodian. You also want to look at the financial strength of the custodian holding the funds of the money market fund. A money market fund with a Top Tier 1 Bank as its custodian is preferred and considered a safer investment. CIC unit trust has Co-op bank as its custodian.
6⃣Track record of the trustee and fund manager. Avoid fund managers or trustees that have been involved in unit trusts where Kenyans lost money and don't have consistent returns. Finally, the reputation of unit trusts is very important when choosing money market fund.
7️⃣ Money market funds are one of the ways to earn compound interest. You can access your money anytime. Join @kahome_steve's Masterclass to understand how to grow your money with Money Market fund and other investment options. This masterclass starts on 9th September.
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