Revealed: Where Kenyans invest their billions in a tough economy

Kenyan savers poured billions of shillings into collective investment schemes in the third quarter of this year, driving total assets to a record high.

This saw the ultra-cautious money market funds retain their crown while higher-yielding fixed-income vehicles gained significant ground, new regulatory data shows.

The total assets under management (AUM) for approved Collective Investment Schemes (CIS) surged 14 per cent in the three months to September 30, hitting Sh679.6 billion, up from Sh596.3 billion at the end of June.

This is according to a quarterly report from the regulator reviewed by the Financial Standard. 

The growth, part of a staggering 1,100 per cent expansion since March 2018, underscores a rapidly deepening investment culture in the country, buoyed by aggressive marketing, new product offerings, and a post-pandemic drive for financial security among a growing middle class.

Despite the burgeoning options, the Capital Markets Authority report reveals a nation of investors still deeply anchored in safety. 

Money Market Funds (MMFs), which invest in short-term, liquid, and low-risk instruments like Treasury Bills and bank deposits, continue to dominate the landscape.

They commanded Sh400 billion, or 58.9 per cent of the entire industry’s AUM at the end of September this year. Their appeal is straightforward: capital preservation and easy access.

“For the typical Kenyan saver moving from a bank savings account, the money market fund is the logical first step,” said Ian Njoroge, an independent analyst.

“It’s familiar, perceived as safe, and offers better returns than most savings accounts without the volatility of the stock market.”

Sanlam Unit Trust’s Money Market Fund is the giant in this space, managing over Sh103 billion alone, followed closely by CIC’s equivalent fund.

Their prevalence highlights a risk-averse core within the market, where certainty often trumps the pursuit of higher, uncertain returns.

Corporate bonds

However, the quarter’s narrative was equally defined by the notable rise of Fixed Income Funds (FIFs). Once a niche segment, these funds, which primarily invest in longer-term government and corporate bonds, saw their AUM swell by 29 per cent to Sh136.8 billion.

They now claim a 20.1 per cent market share, nearly doubling their proportion from just two years before. 

The growth trajectory is striking. In December 2021, MMFs represented over 90 per cent of the market, with FIFs at a mere three per cent.

By September 2025, the MMF share had fallen to 59 per cent while FIFs rose to 20 per cent. This shift signals a growing sophistication and appetite for slightly higher risk for better yields among a segment of investors.

“The fixed income boom is a story of investors chasing better returns in a stabilising macroeconomic environment,” Njoroge said.

“With inflation easing and interest rates potentially plateauing, locking in longer-term government bonds through these funds has become an attractive proposition for those willing to move slightly out of the pure liquidity of money markets.”

The NCBA Fixed Income Fund leads this pack with Sh38.9 billion in AUM, followed by Sanlam’s US Dollar-denominated Fixed Income Fund, indicating demand for both local and foreign currency debt exposure.

The market remains top-heavy. The top five fund managers—Sanlam, Standard Investment Trust Fund (Mansa X), CIC, NCBA, and Britam—control nearly 64 per cent of all assets.

Sanlam leads with a 19.2 per cent share (Sh130.5 billion), just ahead of Standard Investment Trust at 15 per cent (102.1 billion).

Yet, beneath the giants, the industry is broadening. Fourteen different CIS managers now oversee more than Sh10 billion each, collectively holding 90.1 per cent of the market. 

Conversely, 12 smaller schemes manage less than Sh1 billion each, pointing to a long tail of emerging competitors.

Investor numbers tell the most compelling story of expansion. The total number of CIS investors skyrocketed 128 per cent in one year, from 1.3 million in September 2024 to nearly three million by September 2025. This influx, the report notes, is “buoyed by increasing awareness in the market to save and invest, especially during post-Covid era.”

The data provides a clear picture of where fund managers park this massive pool of citizen savings. 

Nearly half (45.6 per cent) of all CIS assets are invested in government securities—treasury bonds, bills, and infrastructure bonds—making the collective investment industry a crucial funder of state expenditure.

Another 31.8 per cent is in fixed deposits, and 9.2 per cent in cash, meaning over 86 per cent of the industry’s assets are in low-risk, interest-bearing local currency instruments.

Financial inclusion

Investments in local listed equities remain minuscule at just 1.7 per cent, reflecting continued caution towards the Nairobi Securities Exchange.                         

The collective data paints a portrait of a Kenyan investor who is increasingly engaged but still prudent.

The dramatic growth in accounts suggests a breakthrough in financial inclusion for investments, moving beyond basic banking.

Analysts say the enduring dominance of money market funds reveals a priority on stability and liquidity, likely for emergency funds or short-term goals. 

The parallel ascent of fixed-income funds, however, shows a maturing cohort within this mass market—likely more experienced savers or institutions—strategically allocating portions of their portfolio to capture higher, longer-term yields as they build towards future objectives like retirement or education funding.

As one retail investor, James Kariuki, put it: “My money market fund is my financial shock absorber. But now I’m learning that putting some in a fixed-income fund is like planting a tree. You leave it be, and it grows steadily bigger over the years.”