1. MONEY MARKETS
Money market fund (MMF) rates are typically calculated based on the fund’s yield, which reflects the returns generated from the fund’s underlying assets, such as government securities, treasury bills, or commercial paper. Here’s an overview of how these rates are calculated:
- Daily Yield Calculation:
The fund calculates the return (yield) it generates per day on the investments it holds. This yield is based on the interest income earned from the underlying securities. - Annualized Yield:
The annual return announced by a money market fund means that the fund is projecting the yield as if it were to stay constant for a full year based on its present performance and compounding effect. - Fund Expenses:
Most MMFs have a management fee of 2% per annum that is charged out of the returns received on the whole fund. The rates that are reported to investors are after expenses.
Money market fund rates have been steadily increasing, with the average daily effective rate climbing to 14.60% per annum in August, up from 14.45% per annum in July.
The Lofty Corban Money Market Fund maintained its leading position for another month, posting an average daily return of 16.85% per annum, translating to a net return of 14.32% per annum after tax.
Following closely were Cytonn, Etica, Arvocap, and Kuza Money Market Funds, with daily average effective rates of 16.80%, 16.70%, 16.02%, and 15.94% per annum, respectively.
About Arvocap Money Market Fund
In November 2023, Arvocap Asset Managers obtained their Fund Management License from the Capital Markets Authority (CMA). Subsequently, in May 2024, the CMA approved their Unit Trust Funds, including the Arvocap Money Market Fund (MMF), under the Capital Markets Act and the Capital Markets (Collective Investment Schemes) Regulations, 2001.
Features:
- Initial Minimum investment amount of KES 3,000.
- Minimum top-up amount of KES 1,000.
- No Lock-in Period
- 2-4 working days’ notice period for withdrawal(s)
Daily Average Yields for MMFs in August
| NO. | FUND MANAGER | NAME OF FUND | DAILY AVERAGE RETURN (% p.a.) | NET RETURN (% p.a.) |
| 1 | Lofty-Corban Asset Management | Lofty-Corban Money Market Fund | 16.85 | 14.32 |
| 2 | Cytonn Asset Management Limited | Cytonn Money Market Fund | 16.80 | 14.28 |
| 3 | Etica Capital Limited | Etica Money Market Fund | 16.70 | 14.19 |
| 4 | Arvocap Asset Management Ltd | Arvocap Money Market Fund | 16.02 | 13.62 |
| 5 | Kuza Asset Management Limited | Kuza Money Market Fund (KES) | 15.94 | 13.55 |
| 6 | GenAfrica Asset Managers Limited | GenAfrica Money Market Fund | 15.47 | 13.15 |
| 7 | Apollo Asset Management Company Limited | Apollo Money Market Fund | 15.42 | 13.11 |
| 8 | Nabo Capital Limited | Nabo Africa Money Market Fund | 15.18 | 12.91 |
| 9 | Genghis Capital | GenCap Hela Imara Fund | 15.04 | 12.78 |
| 10 | Jubilee Financial Services Limited | Jubilee Money Market Fund | 15.03 | 12.78 |
| 11 | Enwealth Financial Services | Enwealth Money Market Fund | 14.94 | 12.70 |
| 12 | KCB Group | KCB Money Market Fund | 14.66 | 12.46 |
| 13 | Madison Investment Managers Limited | Madison Money Market Fund | 14.47 | 12.30 |
| 14 | Co-op Trust Investment Services Limited | Co-op Money Market Fund | 14.47 | 12.30 |
| 15 | Sanlam Investments East Africa Limited | Sanlam Money Market Fund | 14.38 | 12.22 |
| 16 | Mayfair Asset managers | Mayfair Money Market Fund | 14.30 | 12.16 |
| 17 | African Alliance | African Alliance Kenya Money Market Fund | 14.12 | 12.00 |
| 18 | Orient Asset Managers | Orient Kasha Money Market Fund | 13.62 | 11.57 |
| 19 | Dry Associates | Dry Associates Money Market Fund | 13.16 | 11.18 |
| 20 | ICEA Asset Lion Asset Management Limited | ICEA Lion Money Market Fund | 12.94 | 11.00 |
| 21 | CIC Asset Managers Limited | CIC Money Market Fund | 12.91 | 10.97 |
| 22 | Old Mutual Investment Group | Old Mutual Money Market Fund | 12.80 | 10.88 |
| 23 | Britam Asset Managers (Kenya) Limited | Britam Money Market Fund | 12.61 | 10.71 |
| 24 | Equity Bank | Equity Money Market Fund | 12.50 | 10.63 |
| Daily Cumulative Average Return % p.a | 14.60 | 12.41 | ||
Dollar Money Market Fund Returns
The Etica MMF USD fund secured the top position with an average return of 6.90%, followed by Kuza, Lofty Corban, Dry Associates, and Jubilee MMF USD, which posted daily average returns of 6.89%, 6.33%, 6.31%, and 6.01% per annum, respectively.
| NO. | Fund Manager | Name of Fund | Daily Average Return % p.a |
| 1 | Etica MMF | Etica MMF USD | 6.90 |
| 2 | Kuza Asset Management Limited | Kuza Money Market Fund USD | 6.89 |
| 3 | Lofty-Corban | Lofty-Corban Money Market Fund USD | 6.33 |
| 4 | Dry Associates | Dry Associates Money Market Fund USD | 6.31 |
| 5 | Jubilee | Jubilee MMF USD | 6.01 |
| 6 | Old Mutual Investment Group | Old Mutual Money Market Fund USD | 5.28 |
| 7 | Sanlam Investments East Africa Limited | Sanlam Money Market Fund USD | 5.26 |
| 8 | CIC Asset Managers Limited | CIC Money Market Fund USD | 5.15 |
| 9 | Nabo Capital Limited | Nabo Africa Money Market Fund USD | 4.98 |
| 10 | KCB Group | KCB Money Market Fund USD | 4.97 |
| 11 | ABSA Bank | Absa Dollar Fund MMF | 4.53 |
Fixed Income Funds
The Kuza Fixed Income Fund delivered an impressive return of 15.16% per annum, followed by Jubilee, Madison, Erica, and Nabo Fixed Income Funds, which recorded average daily effective returns of 15.11%, 14.83%, 14.68%, and 13.70% per annum, respectively.
| NO. | Fund Manager | Name of Fund | Daily Average Return % p.a |
| 1 | Kuza Asset Management | Kuza Fixed Income Fund (KES) | 15.16 |
| 2 | Jubilee | Jubilee Fixed Income Fund | 15.11 |
| 3 | Madison Asset Managers | Madison Fixed Income Fund | 14.83 |
| 4 | Etica | Etica Fixed Income Fund | 14.68 |
| 5 | Nabo Asset Managers | Nabo Africa Fixed income Fund | 13.70 |
| 6 | Zimele Asset Management | Zimele Fixed Income Market Fund | 13.43 |
| 7 | Britam Asset Managers (Kenya) Limited | British Bond Plus Fund | 13.21 |
| 8 | Mayfair Asset Managers | Mayfair Fixed Income Fund | 11.65 |
| 9 | NCBA | NCBA Fixed Income Fund | 11.42 |
| 10 | African Alliance | African Alliance Fixed Income Fund | 10.55 |
| 11 | Sanlam Investments East Africa Limited | Sanlam Fixed Income Fund | 6.71 |
Special Funds
In the Special Funds category, the Lofty Corban Special MMF led the rankings with a return of 16.69%.
Special Funds are distinct in that they are granted flexibility in developing their asset allocation, though under the guidance and oversight of the CMA. Unlike traditional funds, which typically follow strict asset allocation models, Special Funds have the freedom to tailor and adjust their portfolios to align with specific investment objectives and market conditions.
This flexibility enables fund managers to respond more dynamically to market opportunities and risks.
| NO. | Fund Manager | Name of Fund | Daily Average Return % p.a |
| 1 | Lofty Corban Asset Management | Lofty-Corban Special Money Market Fund | 16.69 |
| 2 | Britam Asset Managers (Kenya) Limited | Britam Special Fixed Income Fund 1 year | 12.57 |
| 3 | Britam Asset Managers (Kenya) Limited | Britam Special Fixed Income Fund 6 Months | 12.40 |
| 4 | Britam Asset Managers (Kenya) Limited | Britam Special Fixed Income Fund 3 months | 12.38 |
| 5 | CIC Asset Managers Limited | CIC Wealth Fund | 11.00 |
2. GOVERNMENT BONDS
In August 2024, the Central Bank of Kenya (CBK) invited bids for two re-opened Infrastructure Bonds (IFBs), IFB1/2023/6.5 (5.8) and IFB1/2023/17 (15.7), aiming to raise KES 50 billion. These were the second IFB issues of 2024 and the first in the 2024/25 fiscal year.
The re-opened bonds, IFB1/2023/017 and IFB1/2023/6.5, with fixed coupon rates of 14.4% and 17.9%, respectively, attracted bids totaling KES 126.3 billion, significantly exceeding the target, resulting in an oversubscription rate of 252.6%. The government accepted bids worth KES 88.7 billion, reflecting an acceptance rate of 70.2%.
Particulars of the Bonds
| Name | Duration (years) | Coupon Rate | Coupon Months | Maturity |
| IFB1/2023/6.5 | 5.8 | 17.93% | May &Nov | May 2030 |
| IFB1/2023/17 | 15.7 | 14.39% | Feb & Aug | Feb 2039 |
3. EQUITIES
In August, the Kenyan stock market experienced mixed results with the NSE 20 and NSE 25 indexes going up slightly by 0.5% and 0.2%, respectively. However, the NASI and NSE 10 indexes fell by 1.9% and 0.5%. This performance was driven by major losses in large companies like Safaricom, EABL, and DTB, which dropped by 8.8%, 4.0%, and 2.3% respectively.
On the other hand, gains from large companies such as Bamburi, NCBA, and Standard Chartered Bank, which increased by 25.0%, 7.6%, and 7.4% respectively, helped balance the losses.
Equities turnover for the month of August was USD 50.9 million, a 13% increase from USD 45 million in July. Foreign investors displayed a bearish sentiment towards select blue-chip stocks, resulting in a net outflow of USD 0.02 million for the month, from the net outflow of USD 4.8 million in July.
4. GLOBAL MARKETS
a) United States:
- Equities: Declined. Investors were unsure about the Federal Reserve’s next steps after July’s rate hike.
- Economic Data: Retail sales improved, but industrial activity slowed. The unemployment rate rose to 3.8%, and inflation ticked up to 3.2%.
- Sectors: Tech giants pulled back. Consumer staples, financials, and real estate were weak, while energy stocks were more resilient.
b) Eurozone:
- Equities: Fell. Only energy and real estate sectors posted positive returns.
- Economic Data: Inflation held steady at 5.3%, but core inflation eased. Unemployment remained at 6.4%. The PMI hit a 33-month low of 47.0.
- Sector Performance: Significant declines in consumer discretionary and banking sectors, though banks recovered after Italy’s tax clarification.
c) UK:
- Equities: Fell. Concerns about the Chinese economy and a deteriorating UK economic outlook impacted the market.
- Economic Data: Headline inflation moderated to 6.8%, but core inflation remained at 6.9%. Wage growth increased to 7.9%. The Bank of England raised rates to 5.25%.
- Sectors: Consumer discretionary and real estate underperformed. Energy was the only sector to rise.
d) Japan:
- Equities: Mixed. The TOPIX index rose slightly, while the Nikkei 225 fell.
- Economic Data: Solid corporate earnings but weakened by political tensions and inflation concerns. The yen remained weak, and there was speculation of government intervention.
- Sector Performance: Domestically-focused stocks performed well; large-cap growth stocks faced challenges.
e) Asia (ex Japan):
- Equities: Sharp declines across all markets.
China: Significant declines due to weak property sector and insufficient stimulus measures.
Hong Kong & South Korea: Also saw declines due to weak manufacturing and property issues.
Taiwan: Fell sharply on fears of a potential financial crisis from China’s debt issues.
