In the first quarter of 2020, MMFs held a market share of 88.2%, an increase from the previous year’s 87.0%.

According to a report by Cytonn Investments, the entire Unit Trust Fund industry grew significantly in the first quarter of 2020. As per the results of the report, the overall Assets under Management (AUM) of the industry grew at a rate of 0.32% to Kshs 76.3 bn in Q1’2020, from Kshs 76.1 bn as at FY’2019.

In the previous two years, the UTF industry grew tremendously compared to how it has grown this year. In 2019, the industry grew at a CAGR of 17.0% to Kshs 76.1 bn in FY’2019 from Kshs 55.6 bn recorded in FY’2017.

According to the analysis report by Cytonn Investment, the growth can be largely attributable to affordability to retail investors, diversification, and liquidity in the industry.

Affordability to retail investors

Unit Trust Funds have become more accessible to retail investors, with a majority of the Collective Investment Schemes’ (CIS) in the market requiring an initial investment ranging between Kshs 100.0 - Kshs 10,000.0

Diversification

Unit Trust Funds are also advantageous in terms of offering investors the opportunity of diversifying their portfolios by providing them with access to a wider range of investment securities even with limited capital, which would have not been accessible if they invested on their own.

Liquidity

Compared to other investment options such as equities, unit trusts are liquid, as it is easy to sell and buy units without depending on supply and demand at the time of investment or exit. Furthermore, the advent of digitization and automation within the industry has enhanced liquidity enabling an investor to receive their funds within 3 to 5 working days if they are withdrawing to their bank accounts, and immediate access to funds when withdrawing via M-Pesa.