Special funds, a sub-category of unit trusts, captured a record 23.9 percent market share in March 2026 as investors flocked to the investment vehicles in search of relatively higher returns.

Money market funds (MMFs), which invest primarily in Treasury bills and commercial bank fixed deposits, lost ground over the same period, with their market share falling to 51.9 percent from 64.4 percent a year earlier.

Both categories nevertheless recorded growth as total assets under management (AUM) rose to Sh851.7 billion in the quarter ended March 2026 from Sh756.3 billion in December 2025, according to data from the Capital Markets Authority (CMA).

A special fund is a type of collective investment scheme (CIS) or unit trust that invests according to a fund manager’s strategy and typically focuses on non-traditional assets such as real estate, private equity, offshore stocks and commodities.

The structure comes with fewer investment restrictions, allowing fund managers to concentrate on selected asset classes, including higher-risk instruments that can generate market-beating returns but also expose investors to significant losses.

Yield hunt

Returns from special funds have generally outperformed those offered by traditional MMFs, which have been affected by the prevailing low-interest-rate environment.

The CMA has attributed the segment’s growth to rising retail investor interest and the development of innovative products by fund managers.

“The trend highlights the continued strong interest in the fund management segment among the general public, particularly in the special funds segment,” the CMA said.

“As a result, both established and new players, alongside newly approved funds, are attracting significant interest as they expand their portfolios and respond to demand for innovative products, as evidenced by increased number of applications for grant of fund manager licence from new players and existing and licensed investment banks initially not in the fund management space expressing interest and applying to establish CIS businesses.”

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Assets under management in special funds rose 25 percent between December 2025 and March 2026 to Sh162.4 billion. In comparison, MMF assets grew four percent to Sh423.7 billion.

The share of special funds within the unit trust industry has increased from 17.5 percent in March 2025.

Market shift

The number of individual special funds also rose from 29 to 38 during the same review period.

The Standard Investment Bank (SIB) Mansa-X shilling-denominated and dollar-denominated special funds remain the largest in the category, with market shares of 64.9 percent and 8.6 percent respectively. The two funds manage Sh132.1 billion and Sh17.4 billion in assets respectively.

Other special funds include Faida Investment Bank’s Oak Multi Asset Special Kenya Shilling Denominated Fund, the Madison Wealth Special Fund and the Britam Special Fund Fixed Income Fund.

Overall, the Sanlam Unit Trust Scheme remains the largest collective investment scheme, with a market share of 18.9 percent and assets of Sh161 billion. It is followed by the Standard Investment Trust Fund and the CIC Unit Trust Scheme, which manage Sh153.1 billion and Sh103.1 billion respectively.

The number of CIS investors increased by more than one million, from 2.5 million in March 2025 to 3.63 million in March 2026, supported by growing awareness of savings and investment products.

Read: Unit trust investors cross 3m, assets hit Sh756bn

As of the end of March, the CMA had approved 62 collective investment schemes, of which 43 were active.

Despite losing market share, MMFs remain the most popular investment fund category ahead of special funds, fixed-income funds, equity funds and balanced funds.

→ kmuiruri@ke.nationmedia.com

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