Updated 29 October 2026
Updated October 2026. Money market fund vs unit trust in Kenya is a slightly misleading comparison, because a money market fund is itself a type of unit trust. “Unit trust” is the umbrella: a collective investment scheme approved by the Capital Markets Authority (CMA) that sells units in one or more funds. Money market funds are the lowest-risk, most popular kind; equity, balanced, fixed income and special funds are the others. This guide explains how they differ, so you pick the right fund for your timeline.
Money market fund vs unit trust: how the market looks in 2026
At 30 June 2026, 66 approved schemes ran 320 funds holding about KSh 948.7 billion for 4.14 million reported investors. Of that, the CMA’s quarterly report counted 59 money market funds holding KSh 459.87 billion, close to half of all unit trust money. The rest sits in fixed income, balanced, equity and special funds. We covered the CMA’s plan to rate these funds in CMA weighs risk ratings for 320 unit trusts.
Fund types compared
| Fund type | What it holds | Risk | Suits money needed in |
|---|---|---|---|
| Money market fund | Treasury bills, bank deposits, short-term paper | Low | Weeks to about a year |
| Fixed income (bond) fund | Government and corporate bonds | Low to medium; prices move with interest rates | 1 to 3 years |
| Balanced fund | A mix of shares and bonds | Medium | 3 to 5 years |
| Equity fund | Shares, mainly on the NSE | High; can fall sharply | 5 years or more |
| Special fund | Concentrated or complex exposures (e.g. global or multi-asset) | Varies, often higher | Long term, experienced investors |
The fund descriptions follow CMA categories; always read the fund’s own information memorandum for its exact limits.
Returns: steady yield vs changing unit price
MMFs usually keep the unit price fixed (often KSh 1) and credit interest daily, so they publish an annual yield. In October 2026 large MMFs were publishing about 10.3% (Old Mutual 10.31% on 13 October; Madison 10.37%). Equity, balanced and bond funds work differently: the unit price goes up and down with the market, so your return is the change in price plus any distribution. They can beat an MMF over several years, and they can also lose money in a bad year. That’s why the CMA has warned managers against marketing unrealistic returns.
Fees, minimums and withdrawals
- Management fee: charged as a yearly percentage of your balance. MMF yields are normally quoted after it, but check the fact sheet.
- Initial fee: some equity and balanced funds charge an entry fee; most MMFs don’t.
- Minimum investment: set by each fund, often low for MMFs. See each fund’s page on our full MMF list.
- Withdrawal time: MMFs commonly pay within a few working days; other funds may take longer.
Safety and tax
Neither MMFs nor other unit trusts are covered by deposit insurance; KDIC lists “unit trusts” and “money market funds” as uninsured products. Protection comes from CMA rules: a licensed fund manager, a separate trustee and a custodian who holds the assets. Interest earned in an MMF is subject to 15% withholding tax for residents. For other fund types, the tax treatment depends on what the fund earns, so ask the manager.
Which should you choose?
- Short-term savings or an emergency buffer: a money market fund.
- Money for 1 to 3 years that you want to earn bond-like returns: a fixed income fund, or buy bonds directly (see Treasury bills vs bonds).
- Retirement or long-term growth: an equity or balanced fund, accepting that the balance will swing.
- Not sure: start with an MMF and add a growth fund later as you learn.
Compare current yields on our T-bill and MMF rates tracker, project returns with the MMF calculator, and see where unit trusts fit in the best investments in Kenya.
Official sources: Capital Markets Authority (check a manager is licensed before investing), KDIC.
Frequently asked questions
Is a money market fund a unit trust?
Yes. A money market fund is one type of unit trust (collective investment scheme). Others include fixed income, balanced, equity and special funds.
Which is better, a money market fund or an equity unit trust?
An MMF is better for short-term, low-risk saving. An equity fund can earn more over five years or longer but can fall in value.
Are unit trusts in Kenya insured?
No. KDIC does not insure unit trusts or money market funds. They are regulated by the CMA and assets are held by a custodian.
How many unit trust funds are there in Kenya?
At 30 June 2026 there were 320 funds in 66 approved schemes, holding about KSh 948.7 billion.
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