NAIROBI, KENYA, SEPT 8― Unit Trust investments in Kenya stagnated in the first half of the year recording a paltry 0.3 per cent growth, latest data shows.
Total Assets Under Management held by Unit Trust Fund Managers closed half-one at Ksh55.2 billion, a paltry growth compared to Ksh55.1 billion recorded in a similar period last year.
Data from fund managers show during the period, assets under management for money market funds grew by 2.1 per cent to Ksh44.5 billion from Ksh43.6 billion recorded in half-one 2017,an indicator the money market funds are growing faster than the overall market.
CIC Asset Managers recorded the strongest growth in Assets Under Management of 21.4 per cent to Ksh15.8 billion, compared to Ksh13.0 billion recorded last year.
Sanlam Investments declined the most by 34.6 per cent to Ksh2.0 billion from Ksh3.0 billion in half-one 2017.
According to industry data, CIC Asset Managers remains the largest overall Unit Trust Fund Manager with a market share at 28.7 per cent this year, up from 23.7 per cent in half-one 2017.
“Money Market Fund remains the largest Unit Trust Fund, with a market share of 80.5 per cent in half-one 2018, up from 79.1 per cent in half-one 2017,” the report notes.
As of September 2018, the number of Fund Managers licensed by the Capital Markets Authority stood at twenty-seven (27).
New entrants over the last nine months into the Fund Management business include Cytonn Asset Managers Limited, licensed on March 22, 2018, who are the regulated affiliate of Cytonn Investments Management Plc.
Cytonn Asset Managers Limited then acquired Seriani Asset Managers Limited as its strategy to accelerate its entry into the Unit Trust Funds Management business.
Top five money market funds by returns are Seriani money market fund which tops the list with the most competitive yield, offering an effective annual yield of 11.62 per cent per annum.
Others are Nabo Africa money market fund(10.76 per cent),CIC Money market fund(10.43 per cent),Madison Asset money market fund(10.40 per cent) and Zimele money market fund offering an effective annual yield of 9.91 per cent per annum.
The top five money market funds control assets under management of Ksh35.4 billion, which translates to 79.6 per cent of the total assets under management in the money market funds.
The top three Unit trust products have a combined market share of 96.4 per cent of the total assets under management in Unit Trust Products, with Money Market Funds being the most popular product have the highest market share of 80.5 per cent.
Top unit trust fund managers are CIC asset managers, British American Asset managers, Old Mutual, ICEA Lion and Commercial Bank of Africa.
Commenting on the results, Maurice Oduor, Principal Officer of Cytonn Asset Managers Limited, said:“The results shows us that a lot more needs to be done to stimulate capital markets. Total investments into products like Unit Trusts and Money Market Funds essentially have no growth year over year, compared to alternative products such as banking deposits, which grew 10.0 per cent year over year.”
“A lot more needs to be done to stimulate capital markets products, because without capital markets we don’t have funding to grow businesses,” he added.