In response to the ongoing depreciation of the local currency, Kenyans are increasingly turning to US dollar-based investments as a safeguard against the economic impacts. This trend is being observed both among domestic investors and members of the diaspora.
The surge in interest for dollar-denominated investment products has led to the establishment of various forex investment vehicles by fund managers. Last year, the Capital Markets Authority (CMA) granted approvals to several fund managers, allowing them to launch dollar-denominated money market funds and fixed-income funds. The move came as the Kenyan Shilling experienced its most significant depreciation against the US dollar in three decades.
In a notable development, the CMA granted approvals between April and June for the registration of the Old Mutual Dollar Money Market Fund. Following this, the third quarter of 2023 witnessed the registrations of the ICEA USD Fixed Income Fund and Sanlam USD Fixed Income Fund. Additionally, the CMA approved the registration of Etica USD Money Market Fund, Etica USD Shariah Fund, Etica USD Wealth Fund, Etica USD Fixed Income Fund, and Enwealth Dollar Money Market Fund.
Wealthy Kenyans, in particular, have been accumulating their dollar reserves in banks, reaching a record high of $7.7 billion, as reported recently.
According to the CMA’s statistics on collective investment schemes, the assets under management in dollar-denominated funds surged to Ksh12.3 billion ($75.7 million). This marked a significant increase from Ksh5.1 billion ($31.4 million) recorded in September 2022.
The growing interest in dollar-based investments reflects a strategic move by investors to shield themselves from the adverse effects of a weakening local currency. As the trend continues, fund managers are expected to further diversify their offerings to meet the rising demand for such investment options in Kenya.
By Delino Gayweh
Serrari Financial Analyst
January 29, 2023
Article and News Disclaimer
The information provided on www.serrarigroup.com is for general informational purposes only. While we strive to keep the information up to date and accurate, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.
www.serrarigroup.com is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information on the website is provided on an "as-is" basis, with no guarantee of completeness, accuracy, timeliness, or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
In no event will www.serrarigroup.com be liable to you or anyone else for any decision made or action taken in reliance on the information provided on the website or for any consequential, special, or similar damages, even if advised of the possibility of such damages.
The articles, news, and information presented on www.serrarigroup.com reflect the opinions of the respective authors and contributors and do not necessarily represent the views of the website or its management. Any views or opinions expressed are solely those of the individual authors and do not represent the website's views or opinions as a whole.
The content on www.serrarigroup.com may include links to external websites, which are provided for convenience and informational purposes only. We have no control over the nature, content, and availability of those sites. The inclusion of any links does not necessarily imply a recommendation or endorsement of the views expressed within them.
Every effort is made to keep the website up and running smoothly. However, www.serrarigroup.com takes no responsibility for, and will not be liable for, the website being temporarily unavailable due to technical issues beyond our control.
Please note that laws, regulations, and information can change rapidly, and we advise you to conduct further research and seek professional advice when necessary.
By using www.serrarigroup.com, you agree to this disclaimer and its terms. If you do not agree with this disclaimer, please do not use the website.
www.serrarigroup.com, reserves the right to update, modify, or remove any part of this disclaimer without prior notice. It is your responsibility to review this disclaimer periodically for changes.
Serrari Group 2023
