A Money Market Fund (MMFs) is a type of collective investment scheme that pools money from many investors and invest in low-risk, short-term financial instruments such as commercial papers and treasury bills. They are becoming one of the most preferred investment options in Kenya especially among young professionals and retail investors seeking safe, liquid and high yield returns. Recent market data shows a sharp rise in uptake as more Kenyans move away from low-yield savings accounts and explore interest-bearing vehicles.
According to Cytonn Q2 2025 Unit Trusts Report, MMFs remain with the largest share allocation of 62.5% in Q2’2025, signifying a Q/Q growth of 16.6% to KES 372.8 bn in Q2’ 2025 from Kshs 319.7 bn in Q1’ 2025. Despite this impressive growth, Cytonn also highlights that Kenya’s MMF penetration remains low, with an AUM- to- GDP ratio of 2.0% well below the global average of 8.8%. This indicates significant room for expansion as financial awareness increases.
The reason why MMFs are gaining popularity is their combination of stability and flexibility. The funds typically invest in short- term, low risk instruments such as Treasury Bills and bank deposits, which makes them ideal for capital preservation. They also allow investors to deposit or withdraw money almost instantly, a feature that appeals to individuals seeking both returns and easy access to cash. This accessibility is also enhanced by the use of mobile money that is using apps like the Cytonn App to deposit and withdraw money.
The MMFs are also ideal for low income earners as the minimum amount to invest in can be as low as KES 100.0 this is according to the Cytonn Money Market Funds. Investing in MMFs can be used in diversification of portfolios. This helps in mitigating risks across the portfolios by having a variety of different investments with different returns and risks. Cytonn’s Money Market Fund has high yields of 12.3%. This high return makes Money Market Funds to gain popularity as people are attracted to high returns.
Cytonn Money Market Fund has 24/7 client support system which attracts investors because they know their queries can be responded to quickly. Money from the MMF’s can be sent easily to friends and family since there are no restrictions, hence gaining popularity.
Although MMFs remain sensitive to interest rates changes and are affected by withholding tax on returns, they continue to outperform most traditional savings accounts. With strong digital adoption and increasing financial literacy, MMFs are likely to remain a preferred investment choice for Kenyan savers in the coming years. (Start your investment journey today with the cytonn money market fund. Call +254(0)709101200 or email sales@cytonn.com)
Thursday, November 27, 2025
The rising popularity of Money Market Funds
