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Transcript

Transcript

Transcript

Imagine investing 1,000,000 shillings and you get a net return of 207,000 without lifting your finger. Now that is possible with some investors who put their money in special funds. Special funds are increasingly becoming a popular investment vehicle for Kenyans looking for above market returns in the passive income category. Some special funds are offering as much as double what the common passive income vehicles are offering. Now. Here are the returns from some of the funds that have already declared their results. At #1 is the Mansa Kenya Shillings special fund, it had a net return of 20.74%. At #2 we have the Coosa Momentum Special fund at 20.62% and then there is the Avoca Almasi fund which is at 20.51%. Then there is a Oak special fund which had a net return of 18.99% and of course the Mansa USD special fund had a return of that. 2.3% in dollar terms. Then there is the pre term Spatio Fixed income fund and the return of 9.94%. These are the special parts that have so far released their results for 2025 with more announcement expected in the coming days. Now according to data from the Capital Markets Authority, CMA Kenyans have put in about 137 billion in special funds as of September 30th 2025 and according to the CMA data. The Mansa Shilling Special Fund has the largest market share, controlling about 63% of the market that is as of September 30th, 2025. It is followed by the Mansa USD Special Fund, which has a market share of 9.2%. Or the official fund has a market share, this is the Oak Special Kenya Shilling Fund has a market share of 6.28%. So the Britam Special Fixed Income Fund had a market share of 4.8% which was the same market share that was shared by the Madson Wealth Fund also at 4.8%. Then there is the NCBA Kenya Shilling Basket note at 3.7% of the market. So you have probably heard of the special funds more in the news. In the last few months and the popularity is contributed by a few factors. So 1. You have to understand how special funds operate because for most Kenyans, the most common collective investment vehicle they know is money market funds but they operate on the same principle that is investors like you and I. We collect and pull our funds together and we hand it over to our fund manager who then invest on our platform. The difference between a money market fund and a special fund is where the fund manager is allowed. To invest with MF, they are mostly allowed to invest in low risk and short term investment vehicles, mostly in T-bills and short term commercial papers. However, with the special funds, the pool where you are allowed to invest is much bigger. Special funds can invest in mid to high risk investments such as local and global stock markets, they can buy rare commodities such as gold, and they can even leverage the portfolio in other sophisticated investment. Platforms, the fact that they have these leeways explains why they returns tend to be bigger than what you’re getting in the low risk investment vehicles. The growing popularity of special funds can be explained in three ways. Number one is of course the strong returns and of course at #2 is the fact that most special funds invest in the equities market that is mostly in listed stock exchanges either in Kenya or globally. And the stock markets have had a good run over the past one year which has. Enabled some of these fans to give very good returns. Now then I see for example, that is the Nairobi Securities Exchange had a dollar return of 52%, making it the second highest in Africa. So some of these funds are able to leverage that benefit and give the investor some good money and #3 is. Related to number 1 is the fact that some of the common low risk investments that Kenyans have invested through collective investment vehicles and that is to build especially have been recording very low returns. Related to the fact that the CBK has also been cut in the CBR which affects what banks will typically offer these investors. If investors are unable to get a good return from a savings account or fixed deposit bank account, then they are more likely to pursue. The high returning investment vehicles such as special funds. However, it is important to note as you’re investing in a special fund, number one is that it is a mid to high risk investment vehicle. While it is important to consider the track record or the performance of the fund over the past few years, it is also important to know that past performance is never a guarantee of future returns. Number 2 is most special funds will have a bit of a restriction on who can invest, so the minimum capital. Might be beyond the reach of many Kenyans and there may be restrictions on top up amounts #3 is that there is also high management fees. The management fees be between 2 and 5% and they are calculated mostly before the performance of the fund is considered. Meaning that even if it the fund was to make a loss, you will still pay the management fee. Money to payfor.co.uk has written more about how special funds operate in Canada, including a detailed review of each of these special funds if you like. Learn more about our investing and growing your money. We also have a partnership with Lower where you can learn more about your finances through a free AI assistant on WhatsApp, and you can also use it to apply for a business loan on New Media.