Apr 8, 2021

FUND PERFORMANCE

* 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

Fund Objective

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.

Portfolio Strategy

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.

Portfolio Performance

The Cytonn Money Market Fund successfully delivered above-market returns in March 2021, averaging 10.7% p.a. The Fund outperformed the industry average and its benchmark of 91-day T-Bill+1% points at 8.1%.

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 by 0.2%, taking the YTD performance to a 0.6% decline. Yields on shorter dated papers were on the rise with the 364-day paper gaining by 0.3% points to 9.3%, while the 182-day and 91-day papers gained by 0.2% points, to 7.9% and 7.1%, respectively. During the month, the Kenya Shilling appreciated by 0.3% against the US Dollar to close the month at Kshs 109.5, from Kshs 109.8 recorded at the end of February, mostly attributable to inflows from agricultural products and remittances outweighing the slowing importer dollar demand.

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.

As of 30th March 2021, cash, bank deposits and government securities constituted 71.5% of the portfolio