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Transcript

Transcript

Transcript

Money market funds or special funds? What’s the difference or are they the same? In this video we breakdown the similarities and the differences between MMS and special funds by looking at the legal setup, the returns and the risks involved. An MF is a low risk investment that pulls money from local investors like you and I and invest in short term and low risk instruments such as specially bills, commercial paper and bank deposits. A special fund, on the other hand, is very similar to. An MMMF in that it’s a collective investment scheme. The fund manager pulls investor capital and invest in a wide range of assets. Unlike MF, investor capital can invest in a wide range field, including mid to high risk investments such as stocks. Here are the major differences. One risk level. Money market funds are low risk because they invest in stable instruments such as treasury bills, commercial paper, and bank deposits. While the returns are low, you are almost assured that your principal will remain. Special funds carry moderate to high risk because they invest in a wide range of. Instrument such as gold, stocks, oil, foreign currencies, derivatives, among others. Because of the risk and leveraged investment approach, returns are not guaranteed and there is a risk that you can also lose. The principle number 2 is returns. Because of their different risk levels, MMFS and special funds also offer different return potential. In 2025, top performing special funds delivered a return of up to 20 point. Even 4%, which nearly doubled the average MF return. Mansa Especial Fund led the category, followed closely by Cuza Momentum Special Fund, which had a return of 20.62%. Meanwhile, MMFS recorded an average return of about 8%, partly due to the decline in the rate of TB in December 2025. Cyton MF LED with the return of 9.75% and it was followed by Naval. Africa, which had a return of 9.45% but three is liquidity. MF are highly liquid, allowing investors to withdraw or deposit money within hours or just a few days. Special funds, on the other hand, often come with locking periods, with a majority requiring a locking period of up to six months #4 is minimum investment. Money market funds have a very low entry point, with some allowing minimum deposit as low as 100. Dealings with the top up starting from around 10 Bob. Special funds typically require higher minimum capital with some starting at 250,000 shillings while others can go as high as 500,000 shilling. Lastly is management fees. Money market funds will typically have low management fees starting at around 2% per year. Some managers only charge management fees on the returns that you get. Special funds on the other hand, come with relatively high management. Please, some of which are calculated even before your investment makes a profit. The typical rate is 5% and this is charged whether you are investment makes a profit or not. For more financial tips like this, we have a partnership with Lua. Lua is a free I Assistant to Notes app that can help you compare different investment instruments, stay ahead of the financial news, schedule meetings and even summarize long documents. You can also use the platform to apply. For a business loan from Numida to get the loan, visit Money to 54.co dot KE or use the link in our bio.