Kenya's Investors Are Moving Beyond the Money Market Fund to Special Funds

Special Funds have quietly become the second-largest fund category in Kenya's collective investment market, and the data suggests this shift is only getting started.

For years, the Money Market Fund has been the default answer to the question of where to put your money in Kenya. Low risk, easy access, better returns than a savings account. For many investors, it was the first real step into the world of investing, and it served that purpose well.

But something has been shifting. Quietly, steadily, and now unmistakably.

According to the Capital Markets Authority's Collective Investment Schemes Quarterly Report for the period ended September 30, 2025, Special Funds have grown to become the second-largest fund category in Kenya's CIS market. They now hold Kshs. 137.8 billion in assets under management, representing 20.3% of the total market. More strikingly, they recorded 22% growth between Q2 and Q3 2025 alone, the highest quarterly growth rate of any fund category.

Special Funds grew 22% between Q2 and Q3 2025, the highest quarterly growth of any fund category in Kenya's CIS market.

The MMF Era Is Maturing

None of this means Money Market Funds are disappearing. At Kshs. 400 billion and 58.9% of total CIS AUM, they remain dominant. But the trajectory tells a different story. In December 2021, MMFs commanded over 90% of the CIS market. That figure has now fallen by over 30 percentage points. Meanwhile, Special Funds have grown from near-obscurity to nearly matching Fixed Income Funds, which hold Kshs. 136.8 billion or 20.1% of the market.

This is not a crisis for MMFs. It is a sign of a maturing investor base. As more Kenyans move beyond their first investment product, they are asking a natural next question: what comes after the money market fund?

Why Special Funds, and Why Now?

Several forces are driving the interest. First, there is the straightforward pull of higher returns. MMF yields are constrained by the instruments they can hold, primarily short-term government securities and fixed deposits. With Treasury bill rates declining, the ceiling on MMF returns is falling too. Special Funds, by contrast, operate with far fewer investment restrictions, giving fund managers the flexibility to seek returns across a broader universe of asset classes.

Second, there is growing awareness of currency risk. Kenya's investor base has watched the shilling weaken over time, and many are now looking for ways to hold assets in stronger currencies. Foreign currency-denominated funds grew from Kshs. 23.8 billion in June 2024 to Kshs. 71.3 billion by September 2025, a 199% increase in just 15 months. USD-denominated Special Funds have been a significant part of that story.

Third, and perhaps most fundamentally, the CMA data reveals a concentration risk that many investors are only now beginning to recognise. Over 77% of all Kenyan CIS assets sit in government securities and fixed deposits. Offshore listed investments, the gateway to global markets, represent just 4% of total AUM. For a country whose investors are increasingly globally aware, that number is striking.

The Case for Global Diversification

This is where products like the Kibaba Multi-Asset Special Fund from Ndovu Wealth enter the conversation. As a CMA-regulated Special Collective Investment Scheme, Kibaba is designed to give Kenyan investors direct access to global multi-asset diversification within a professionally managed and actively risk-managed structure.

The CIS data shows that the shift toward Special Funds is not a trend driven by hype. It is driven by logic: investors who understand that a single asset class in a single currency in a single country is not a portfolio, it is a bet.

The question Kenya's investors are now asking is not whether to diversify, but how, and into what. Special Funds, with their flexibility, global reach, and regulatory oversight, are increasingly the answer.

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