Before the Covid 2020 pandemic, the phrases unit trusts, collective investment schemes and money market funds or MMFs were barely in the public consciousness. Today, the term MMF is certainly a household name and will likely remain so in years to come.
A niche asset class five years ago, unit trusts now command just under Sh700 billion in value while the number of Kenyans invested in the collective investment schemes (CISs) is just under three million, nearly twice the number of individual shares trading accounts at the Nairobi Securities Exchange (NSE).
Since March 2018, the assets under management (AUM) of unit trusts have grown 12 times from Sh56.6 billion to Sh679.6 billion as of the end of September 2025. The increase has been partly attributed to intense marketing efforts by the fund managers.
The number of investors in unit trusts has more than doubled over the past year, rising from 1.29 million in September 2024 to 2.95 million a year later.
The Capital Markets Authority (CMA) says the growth in the number of individuals investing through the collective schemes has been anchored on increased awareness in the market to save and invest, especially post the Covid-19 pandemic era.
For Fred Mburu, the chief executive officer of the Fund Managers Association (FMA), Kenyans have fallen in love with unit trusts over their simplicity.
He helped establish Kenya’s first unit trust in the 2000 during his time at Old Mutual, but never envisioned creating the wave seen today.
“I didn’t think unit trust assets would be as good as they are now, but we had the belief at the time when we were launching, as we had seen how similar products had performed in other jurisdictions,” he said on Business Daily’s Make Money podcast in October 2025.
“Back then when we launched the first unit trust, we were doing it for the primary reason of enabling individuals to participate in investments. Back then, investing was primarily done through bank deposits and chamas. We had a belief that we could transform this.”
Unit trust or collective investment schemes are vehicles that pool funds from individual investors and invest them as a single pot overseen by a professional fund manager.
Investors own units in the scheme in the same way as they would share. The returns generated are split equally between unit holders based on everyone’s stake or piece of the fund.
Money market funds or MMFs have been the most popular type of unit trusts and have almost been synonymous with the CISs industry.
MMFs invest primarily in the high liquid Treasury bills and commercial bank fixed deposits, making them easier to understand and liquidate whenever an investor needs cash.
The MMFs are now serving some individual investors as an emergency fund given the ease of accessing funds. Fund managers have attributed the popularity of MMFs to intense retail investor education which has allowed the professionals to earn the trust of the public.
“What we did was to educate the public in terms of what pooling meant and what unit trusts are, to the extent that in those pioneering days, I felt more like a teacher than an investment manager. We simplified the product to the extent that people were able to understand it-that then created credibility and trust-and people invest in what they trust,” Mr Mburu added.
Demand for MMFs has continued to grow despite the decline in their returns over the past 12 months as the Central Bank of Kenya (CBK) pushed interest rates down.
MMF returns which hit highs of 17 percent in 2024 have fallen back to single digits as rates earned from Treasury bills and commercial bank fixed deposits fall. The CBK induced the interest rates decline by cutting its benchmark rate from 13 percent in August 2024 to 9 percent in December 2025, in a bid to push for the recovery of private sector lending.
The low risks involved in buying into MMFs including capital preservation have seen the funds remain a staple.
There are however other products within the unit trusts universe including equity funds which primarily invest in NSE listed stocks, fixed income funds which invest mostly in government bonds and balanced funds which are technically a mix of equity and fixed income funds.
The last class of unit trusts are special funds which allow fund managers to invest in more specific asset classes with fewer restrictions including property, offshore instruments, private equity and even commodities.
The special funds which are seen as riskier and generally require higher investment amounts while charging more fees, could now become the next MMFs as investors gravitate towards the funds for their relatively higher returns.
The proportion of MMFs as a share of total pooled investments slid to 58.9 percent in September 2025, falling below 60 percent for the first time as assets in the special funds rose to a fifth of the industry or 20.3 percent.
For fund managers, establishing special funds has been a point of differentiation as other types of funds like MMFs largely offer the same kind of returns. The managers offering special funds are earning as much as six percent of AUM in fees each year while offering returns relatively higher than MMFs.
“Fees on MMFs are running anywhere from 1 to 2 percent. That market has become so competitive and fund managers must differentiate themselves by seeking higher returns via access to other markets,” Ndovu Wealth Management co-founder and chief executive officer Radhika Bhachu said.
Unit trusts are expected to remain at the heart of personal investing going into 2026 based on the well-established blueprint set by fund managers.
MMFs are seen remaining at the top of the pile even as investors grow in sophistication to venture into other types of funds.
The AUM of unit trusts will likely surpass the Sh1 trillion mark as the number of individual investors rise past three million anchored on innovations such as cross-sector collaborations such as the Safaricom, ALA Capital and Standard Investment Bank (SIB) which created the Ziidi MMF, a fund with nearly half of all collective schemes investors which taps users in the M-Pesa ecosystem.
“If you are invested in an MMF, you have only dipped your toe in. If you want to learn how to swim, then the goal is venturing into other funds,” Mr Mburu added.
“If the sky's the limit, I’d see ours as the industry having assets north of Sh2 trillion.”
