This archive report was first published on 18 October 2019.
What are Money Market Funds? ¶
Money market funds are a type of collective investment scheme where individuals pool their funds to invest in liquid, interest-earning instruments such as bank deposits, treasury bills, and commercial papers.
Published on October 18, 2019, the Capital Markets Authority (CMA) regulates money market funds in Kenya, ensuring that they operate within the guidelines set by the Collective Investment Schemes Act.
Benefits of Investing in Money Market Funds ¶
- Low initial investments: You can start investing with as little as KES 1,000, making it accessible to a wide range of Kenyans.
- Professional fund management: Investment managers with expertise in screening attractive investment opportunities manage money market funds.
- Potential for excellent returns: Through pooling of funds and professional management, money market funds can provide excellent returns in the long term.
- Security of the fund: Money market funds are regulated by the CMA and controlled by the Collective Investment Schemes Act, which prohibits investment managers from taking certain risks.
- Transparency and effective communication: Money market funds are required to publish their daily and effective annual yield in the daily newspapers, allowing investors to track their investments and compare performance.
- Easy access to funds: Investors can easily redeem their funds, either in full or partial, based on the prevailing unit price.
