By Research Team, May 31, 2021
*Percentage you can expect to earn with the fund during one year of investment on basis of the so far realized monthly returns since inception.
FUND MANAGERS REPORT AND OUTLOOK
The Cytonn Money Market Fund is a low-risk fund that seeks to obtain a high level of current income while protecting investor’s capital and liquidity.
The portfolio objective will be to outperform the income yield available on money market call accounts and fixed deposit accounts by investing in interest-bearing securities and other short-term money market instruments. These securities are usually available to the wholesale or institutional clients. The Fund will also be managed conservatively with active management of duration, credit and liquidity risks.
Economic Report and Outlook
According to Kenya National Bureau of Statistics (KNBS), the Kenyan economy recorded a 1.1% contraction in Q3’2020 down from a growth of 5.8% recorded in a similar period in 2019. This was the second consecutive contraction, after the 5.7% recorded in Q2’2020, pointing to an economic recession. The overall performance was cushioned by growths in Agriculture, Forestry and Fishing activities which grew by 6.3%; Financial and Insurance activities, 5.3%; Construction, 16.2%; Real Estate Activities, 5.3% and Mining and Quarrying activities, 18.2%. Accommodation & tourism and the Education sectors were the hardest hit, declining by 57.9% and
41.9% respectively. During the month, the yields on the government securities in the secondary market remained relatively stable, which saw the FTSE NSE Kenya Government Bond Index decline marginally by 0.1%, taking the YTD performance to a 1.3% decline. Yields on shorter dated papers declined, with the 364-day and 182-day papers declining marginally by 0.3% and 0.1% points to 9.2% and 7.9%, respectively, while the 91-day paper remained unchanged at 7.1%. During the month, the Kenya Shilling appreciated marginally by 0.2% against the US Dollar to close the month at Kshs 107.6, from Kshs 107.8 recorded at the end of April, mostly attributable to the adequate supply of dollars from exporters amid a drop in demand from commodity importers.
Going forward, Cytonn Asset Managers Limited (CAML) expects the Cytonn Money Market Fund (CMMF) to continue to deliver above-average returns leveraging on optimal asset allocation in line with the Fund’s Investment Policy Statement.
The Cytonn Money Market Fund successfully delivered above-market returns in May 2021, averaging 10.5% p.a. The Fund outperformed the industry average and its benchmark of 91-day T-Bill+1% points at 8.2%.
As of 28th May 2021, cash, bank deposits and government securities constituted 73.0% of the portfolio
Actual Asset Allocation
Disclaimer: Past performance is not a guarantee of future performance and the value of the fund will fluctuate from time to time.