The Capital Markets Authority (CMA), which regulates Kenya’s unit trusts, is working on proposals for an independent agency to rate the risk of unit trusts, money market funds included. A money market fund pools savers’ money and invests it in short-term instruments such as treasury bills, bank deposits and commercial paper, as we explained in 2022. Funds in that category are routinely compared on their yields.
The quarterly report on collective investment schemes for the period ended 30th June 2026 lists 66 approved schemes with 320 funds between them. They hold KES 948.7 billion for about 4.1 million investors, compared with 2.5 million a year earlier. The 320 funds span every category, and 59 of them are money market funds, holding KES 459.9 billion, about 48.5% of the total. Three of those, from SanlamAllianz, CIC and Old Mutual, hold about half of that money between them.
CMA chief executive Wyckliffe Shamiah says the regulator gets enquiries from investors every day asking whether particular funds are suitable or safe. The proposals would answer that with two separate ratings. A fund rating looks at the portfolio: the quality of its assets, the chance that a borrower defaults, how much its returns swing, its exposure to foreign currency and how easily it can pay out withdrawals. Funds with concentrated or complex holdings, which the CMA calls special funds, would also be tested on cash flow, liquid assets and borrowing. A manager rating looks at the company running the fund: its systems, its staff, its governance and its track record. Neither rating forecasts what a fund will pay.
Two funds paying the same yield can hold very different things, and a rating would be one more way to tell them apart. The Fund Managers Association, whose members run the funds, has welcomed the idea, and its chief executive, Fred Mburu, calls ratings an addition to managers’ own due diligence.
The CMA has published no draft rule, rating scale or deadline for public comment. It has also not said whether ratings would be compulsory or optional, which agency would do the rating, or who would pay for it. Who pays is the main open question, because a rating paid for by the manager being rated carries an obvious conflict of interest.
Nothing changes for anyone holding units until a draft appears. When one does, the questions are which funds it covers and whether a rating is compulsory: if it is optional, any manager can decline one, including the three that hold about half the category’s money.
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