Kenya Money Market Fund Performance Update: Week Ending 6th June 2025

🧾 Overview

The money market fund (MMF) segment remained robust in the first week of June 2025, maintaining attractive returns amid marginal declines in Treasury bill yields. The average yield of the top 10 MMFs held steady at 13.0%, well above the comparable short-term government securities, highlighting MMFs’ ongoing appeal for yield-seeking investors.

Top 10 MMFs by Effective Annual Rate (EAR)

Average Top 10 Yield: 13.0%

Treasury Bill Yields (Week Ending 6th June 2025)

T-Bill yields continued their downward trend, enhancing the relative attractiveness of MMFs for short-term investors.

YTD Top 5 MMFs by Performance

These funds have maintained strong, compounding returns, making them attractive options for investors with systematic investing strategies.

📉 Worst Performing MMFs This Week

The consistently low yield of Equity MMF and the underperformance of Ziidi MMF—despite its high-profile launch—raise important investor questions regarding fund efficiency and strategy alignment.

Key Takeaways & Insights

1. MMFs Continue to Outperform T-Bills Significantly

While Treasury bill yields declined marginally for the second consecutive week, the average yield of the top 10 MMFs held steady at 13.0%, creating a spread of up to 4.7 percentage points compared to the 364-day T-bill. This reaffirms the superior risk-adjusted returns and daily liquidity advantages MMFs currently offer over traditional government instruments.

2. Gulfcap, Cytonn Maintain Lead — Reinforcing Brand Strength

Gulfcap (13.9%) and Cytonn (13.6%) held onto the top two spots for the third consecutive week, indicating yield stability and possibly stronger portfolio positioning. These funds are increasingly becoming benchmarks in the retail MMF space, especially for high-frequency savers.

3. Minimal Volatility in the Top 10

Compared to the previous week, there were no major shifts in the rankings of the top performers. This could reflect:

• A maturing fixed income outlook where managers are maintaining stable short-term allocations.
• Limited changes in the underlying market rates in the short run.

4. Ziidi & Equity MMFs Raise Concerns

The Equity MMF continues to significantly underperform the market with a yield of 5.4%, less than half of the average top 10. Similarly, Ziidi MMF — despite its high-profile launch with Safaricom PLC — delivered just 7.1%. This raises concerns about:

• Cost structures
• Asset allocation conservatism
• Management strategy in relation to peer funds

Investors in these funds may wish to re-evaluate their capital efficiency and consider exploring higher-yielding alternatives while monitoring fund disclosures.

5. Top 5 YTD Performers Suggest Compounding Edge

Year-to-date leaders like Gulfcap (15.5%), Cytonn (15.3%), and Kuza (14.3%) are delivering consistent outperformance — providing a compounding edge especially for investors with monthly or quarterly top-ups. This consistency is crucial in a high inflation, yield-seeking environment.

Strategic Outlook

In light of declining T-bill yields and tightening liquidity conditions, MMF yields are likely to remain attractive but stable in the short-term. However:

• Funds with flexible, higher-yielding short-term paper will continue to outperform.
• Investors should monitor management fees, portfolio disclosures, and NAV trends — especially in newer or underperforming funds.

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