The number of investors in unit trusts has risen to 4.15 million from 2.45 million a year ago as more Kenyans opt for passive high-return income instead of investing in startups in an economy that has oscillated between soft and strong growth.
The large influx of new investors has seen the value of assets under management in the collective investment schemes (CIS) approach Sh1 trillion, having grown by 59 percent from Sh596.3 billion in June 2025 to Sh948.7 billion in June 2026.
The number of investors in the funds is now three times those investing in the equities market at the Nairobi Securities Exchange (NSE), which has remained relatively flat at between 1.25 million and 1.28 million investors over the last three years.
The slower growth of new investors in the stock market despite the bourse’s current bull run that has seen investor wealth hit a record Sh4.28 trillion shows that a number of those seeking exposure to equities are doing so through structured investments offered by fund managers.
CISs pool money from various investors to purchase a diversified portfolio of securities such as stocks, bonds, offshore assets, Reits, and commercial papers.
The funds are managed by professional fund managers, while investors own units in the trust earning a return from the income generated by the underlying assets, including dividends, interest and capital gains.
By opting to have their investment handled by professionals, CIS investors are usually looking to avoid the risk of loss from uninformed investment decisions. The unit trusts also offer investors liquidity while exposing them to assets such as bonds and Treasury bills which would otherwise be difficult to turn into cash on short notice.
“The number of investors in the various CIS funds has continued to grow steadily over time, buoyed by increasing awareness in the market to save and invest, especially in the post-Covid era.
In the second quarter, 98 percent of the CIS Investors comprised local retail (Kenyan), with the remainder spread across the other profiles,” the Capital Markets Authority (CMA) said in its collective investment schemes report for the second quarter of 2026.
The growth in CIS investor numbers and assets under management has come despite the returns from money market funds—the dominant unit trust class— falling over the period as interest rates from government securities and fixed cash deposits came down significantly.
To maintain their attractiveness, unit trust providers have turned to special funds that invest in offshore assets, helping them maintain the high returns that have fuelled the steep growth in new investor numbers.
By the end of June, the value of assets under management in special funds such as Standard Investment Bank’s Mansa X and Faida Investment Bank’s Oak Multi Asset Special Funds stood at Sh252.8 billion, accounting for 27 percent of the industry’s total assets.
The special funds held assets of Sh113.4 billion, or 19 percent of the industry total in June 2025, making them the fastest-growing unit trust segment.
Illustrating the growth of special funds, the industry saw its exposure to offshore assets rise to Sh131.7 billion in June, from Sh51.8 billion a year earlier.
“This breadth of diversification and global market exposure is increasingly important to investors navigating an unpredictable market environment,” said SIB executive director for global markets and portfolio manager of the Mansa-X Special Funds, Nahashon Mungai.
The expansion of the Mansa X special funds has lifted the SIB unit trusts to become the largest in the industry with assets under management of Sh188.6 billion, or a 19.9 percent market share, ahead of Sanlam Unit Trust Scheme at Sh171.4 billion or 18.1 percent market share.
Others in the top five are CIC, Britam and NCBA unit trust schemes at Sh105.2 billion, Sh71.3 billion and Sh50.5 billion, translating to market shares of 11.1 percent, 7.5 percent and 5.3 percent respectively.
Money market funds, however, remain the largest unit trust segment despite recording a loss of market share to special funds.
The money market funds, which primarily invest in Treasury bills and fixed cash deposits, held assets of Sh459.9 billion as at June 2026, or 48.5 percent of the industry total. A year ago, they held assets worth Sh372.8 billion, or 62.5 percent of total assets.
Interest rates on Treasury bills have fallen to a range of 8.7 percent to 9.07 percent currently, from highs of 17 percent in August 2024.
Similarly, the annual interest rates on fixed deposits in banks have come down to 6.93 percent from highs of 11.4 percent two years ago.
Money market fund annual returns have thus declined to a range of 4.9 percent to 11.1 percent, depending on the unit trust provider, from highs of 17 percent towards the end of 2024.
Fixed income funds account for the third-highest share of assets under management at Sh228.1 billion or 24 percent of the industry total, with equity funds and balanced funds trailing with assets of Sh5.84 billion and Sh2.1 billion respectively, combining for a 0.8 percent market share.
