KES Money Market Funds — Daily Desk

Market Overview

Kenya's money market fund sector continues to offer compelling returns for conservative investors in late May 2026. Across the 27 CMA-regulated KES-denominated MMFs tracked by the Serrari Kenya KES MMF Average Index, the market-wide average yield stands at 9.11% EAR, while the Serrari Leaders Index — a 3-month rolling average of the top five performers — sits at 11.44%.

The yield environment is shaped by three dominant forces. First, the Central Bank of Kenya held the benchmark rate at 8.75% at its April 2026 MPC meeting, pausing a record nine consecutive cuts that brought the CBR down from 13% in late 2023, citing rising global risks from Middle East tensions and elevated oil and fertiliser prices. Second, inflation remains well-anchored at 3.56% in April 2026, comfortably within the CBK's 2.5–7.5% target band, leaving real returns on most top-performing MMFs firmly positive. Third, Treasury-bill rates have continued to drift lower, with the 91-day paper around 8.39%, pushing yield-hungry investors toward the higher end of the MMF spectrum.

Total assets under management in Kenya's Collective Investment Schemes industry surpassed KES 680 billion, with MMFs accounting for approximately 59% of the total — down from over 90% in 2021 as investors diversify. Even so, MMFs remain the dominant savings vehicle, buoyed by mobile-money integration, low entry points, and same-day or T+1 liquidity.

Sources: Serrari Group MMF Tracker (28 May 2026), CBK MPC Statement (8 Apr 2026), KNBS CPI Release (Apr 2026), CMA Quarterly Statistical Bulletin.

Full Fund Rankings — All 27 KES MMFs

The table below ranks all 27 CMA-regulated KES money market funds by their current effective annual rate. Minimum investments range from as low as KES 100 (Etica, Safaricom) to KES 1 million (Dry Associates).

Top 10 Funds vs. Key Benchmarks

The top 10 funds all deliver EARs above 10%, significantly outperforming the 91-day Treasury-bill rate of approximately 8.39% and the CBK policy rate of 8.75%. This premium compensates investors for marginally higher credit risk relative to sovereign paper, while still offering daily or next-day liquidity. Nabo leads at 12.34% — a 3.95pp premium over the 91-day T-bill and 3.59 points above the CBR — but its KES 100,000 minimum places it out of reach for many retail savers. Cytonn (12.04%) and Etica (11.23%) offer strong alternatives with substantially lower entry points of KES 1,000 and KES 100 respectively.

Yield Distribution Analysis

The histogram reveals a right-skewed distribution. The bulk of funds cluster between 8% and 11%, while a small tail of three to four outperformers stretches above 11%. At the other end, five funds deliver yields below 7% — primarily bank-affiliated platforms (Equity 5.07%, Stanbic 5.31%, NCBA 6.83%) where the value proposition leans on banking-app integration rather than headline yield. The spread between the highest (12.34%) and lowest (5.07%) fund is 7.27 percentage points: a KES 1 million investment would earn roughly KES 123,400 annually in Nabo versus KES 50,700 in Equity — a difference of KES 72,700 before tax and fees.

Accessibility vs. Yield — Who Can Access What?

Not all high-yielding funds are accessible to the average saver. The highest-yielding fund (Nabo, 12.34%) requires KES 100,000, while the most accessible high-yielder is Etica at 11.23% with a KES 100 minimum. GenAfrica (KES 500K) and Dry Associates (KES 1M) sit in the institutional segment with mid-range yields. For retail investors starting small, the best value propositions are Etica (KES 100, 11.23%), Cytonn (KES 1K, 12.04%) and Lofty Corban (KES 1K, 10.72%) — above-average yields with genuinely low barriers to entry.

Understanding Fees and Net Returns

Management fees typically range from 1.5% to 2.5% of AUM per year. In addition, a 15% withholding tax (WHT) is deducted from interest earnings before they are credited. This means a fund reporting a 12.34% gross yield with a 2.25% fee delivers approximately 10.09% after fees, and roughly 8.58% after WHT.

How to Choose the Right MMF

Selecting a money market fund involves balancing several factors beyond headline yield.

Yield vs. Risk: higher yields often reflect a manager's willingness to take marginally more credit risk or invest in longer-dated instruments within the permitted range. The top three — Nabo, Cytonn and Etica — have held their positions across multiple quarters, suggesting structural advantages rather than temporary spikes.

Accessibility and Liquidity: minimums range from KES 100 to KES 1 million. For most retail investors, funds with minimums of KES 1,000 or below offer the best mix of flexibility and returns. Check redemption terms — most funds offer T+1, but some take up to T+3.

Platform Integration: bank-affiliated MMFs (Equity, KCB, Stanbic, NCBA) offer lower yields but seamless banking-app integration; independent managers (Cytonn, Etica, Nabo) generally offer higher returns but may require separate onboarding. Safaricom's fund trades yield (6.93%) for unmatched M-Pesa convenience.

Outlook — What to Watch

The next CBK MPC meeting is scheduled for 9 June 2026. While the committee held in April, persistent disinflation (inflation at 3.56% is well below the 5% midpoint target) and robust GDP growth of 5.3–5.6% leave room for further easing. A rate cut would likely compress T-bill yields further, which could paradoxically benefit MMFs as investors rotate out of sovereign paper into higher-yielding fund products.

The CMA's revised regulatory framework, with a December 2026 compliance deadline, introduces doubled paid-up capital requirements (KES 20 million) and mandatory monthly reporting. This may consolidate the sector: smaller managers unable to meet the thresholds could merge or exit, potentially reducing the number of tracked funds while improving average quality.

For investors currently earning below the Serrari Average Index (9.11%), a reallocation to a top-quartile fund could meaningfully improve returns — switching from a ~6% bottom-quintile fund to a ~11% top-five fund adds roughly KES 50,000 per year on a KES 1 million balance for a comparable risk profile.

Sources: CBK MPC Calendar, CMA Regulatory Framework Notice (2025), Serrari Group analysis.

Disclaimer

This content is produced by Serrari Group for information and educational purposes only. It is not investment, legal or tax advice and does not consider your individual circumstances. Figures are sourced as indicated and were accurate as at the stated date; markets move and past performance is not a guarantee of future results. Always do your own research and consider professional advice before investing. All MMFs are regulated by the Capital Markets Authority (CMA) of Kenya.