Kenyan investment management firm Lofty-Corban has announced that Collective Investment Schemes (CIS) Assets Under Management (AUM) have exceeded the KSh 1 billion mark within just nine months since its inception in August 2023.
The funds’ AUM effectively doubled from KSh 459M in December 2023 to stand at KSh 1.105bn, having onboarded over 2,000 clients to solidify its market share.
“We are thrilled to have achieved this significant milestone in such a short period since the official launch of our company and the respective funds,” said Stanley Mutuku, Chief Executive Officer of Lofty Corban.
Mutuku noted that in response to the Central Bank of Kenya’s increased base rates over the past year, Lofty Corban’s flagship product, the L-CIL KSh Money Market Fund has significantly enhanced its returns with the effective annual yield rising to an impressive 18.34%, with a daily yield of 16.96% as of May 7, 2024.
Pointing out that the firm expects collective investment schemes to maintain steady demand, driven by global interest rates that will remain higher for longer given the unrelenting higher inflation levels in advanced markets.
“Therefore, financing conditions are likely to remain tight in keeping with reliance on high domestic budgetary financing and consequently, elevated domestic interest rates,” he added.
Mutuku explained that collective investment schemes had gained popularity among Kenyan retail investors as illustrated by the Capital Markets Authority in its December 2023 report which noted that Money Market Funds constitute 65% of all funds under management by Collective Investment Schemes in Kenya.
The attraction of the money market funds, said Mutuku, is in its versatility as a tool for savings and investment. They also offer higher returns, liquidity, professional management, and compounded interest in the case of Money Market Funds MMFs stand out as a compelling choice among the myriad investment vehicles available, offering low risk, safety, and stability with a primary objective of capital preservation. Despite economic fluctuations, MMFs have consistently provided a solid hedge against inflation for Kenyan investors seeking to grow their wealth securely.
Other collective investment schemes whose popularity is rising are Bond Funds and Equity Funds, which investors select based on their overall objective and may be either capital preservation, asset growth, or income generation.
