Kenyan money market funds average 9.3% return, down from 9.9% a year earlier

The average annualised return on Kenyan money market funds, net of fees, fell to 9.3 per cent on 15 October 2026 from 9.9 per cent a year earlier, Business Daily reported on 18 October 2026, based on the 26 funds it tracks. Twenty of the 26 returned less than a year ago. Six returned more.

The paper said the fall mirrors lower interest rates on the funds' underlying assets. The number of funds paying double-digit annualised returns slipped from 14 to 13.

The rate on the one-year Treasury bill has fallen from 9.39 per cent in mid-October 2025 to 9.03 per cent. Returns on commercial bank fixed deposits fell from 7.5 per cent in October 2025 to 6.91 per cent in August 2026.

The Central Bank of Kenya (CBK) gave the latest government paper figures in its weekly bulletin of 16 October 2026. At the Treasury bill auction of 15 October, the average interest rate was 8.750 per cent on the 91-day bill, 8.860 per cent on the 182-day bill and 9.038 per cent on the 364-day bill. The CBK said rates on the 91-day and 182-day bills declined and the 364-day rate rose marginally.

Bids at that auction totalled KSh 68.5 billion against KSh 28.0 billion advertised, a performance of 244.6 per cent. At the CBK's rate of KSh 129.81 to the US dollar on 15 October, the bids come to about US$528 million.

At the Treasury bond auction of 14 October, the reopened 30-year bonds drew bids of KSh 83.8 billion (about US$646 million at the same rate) against KSh 50.0 billion advertised, a performance of 167.7 per cent. The CBK said the Kenya Shilling Overnight Interbank Average (KESONIA), the rate at which banks lend to each other overnight, stayed at 8.75 per cent in the week ended 15 October.

Money market funds held 48.5 per cent of unit trust assets at the end of June 2026, down from 51.9 per cent in March, falling below the 50 per cent mark in that quarter. A unit trust pools many investors' money in one fund.

The share held by special funds rose from 23.9 per cent to 26.6 per cent. The paper said they have largely delivered higher returns than money market funds through multi-asset strategies and exposure to non-traditional assets such as unlisted equities and offshore stocks, but carry moderate to high risk. In the quarter to June, assets in special funds grew 24 per cent and those in money market funds grew 4 per cent.

Linus Kang'ara, chief executive officer of Capital A Investment Bank, said, as quoted by Business Daily: "The growth of special funds vis-à-vis MMFs is purely driven by investors chasing returns."