By Benadeta Mwaura - Reporter
Kenya, November 29 2025 - Kenya’s unit-trust industry is experiencing a striking boom as retail investors rush into pooled funds, lifting assets under management to a record Sh679.6 billion by the end of September and swelling investor numbers to 2.96 million, more than double the count a year earlier.
The jump, revealed in Capital Markets Authority (CMA) data reported by Business Daily, captures a market in the middle of a rapid transformation: what a few years ago was a niche product has become a mainstream savings and investment channel for ordinary Kenyans. The CMA attributed the surge to aggressive digital marketing, investor education, and the growth of special funds that offer new ways to diversify portfolios.
From safe havens to special funds, what’s driving the rush Money market funds remain the backbone of the industry, accounting for around 59 percent of total assets as investors seek liquidity and safety in a period of volatile markets. But the rise of fixed-income and special funds this year has been notable: special funds and fixed-income funds have grabbed market share as investors hunt for higher yields and currency-diversified exposure. Special funds’ assets climbed sharply to Sh137.8 billion in September, up from Sh70.4 billion in December 2024.
Industry analysts say several forces combined to ignite the expansion. Low minimum investment thresholds, some schemes allow entry with as little as KSh100, plus concerted investor education drives by fund managers and the regulator have lowered barriers and boosted financial inclusion.
A Cytonn analysis of the CMA’s Q2 2025 report shows AUM surged to KSh596.3 billion in June 2025, a 20.2 percent quarter-on-quarter rise and a more than threefold increase year-on-year, underscoring that the growth trend has been building for months.
Who’s winning, and where the money sits
Fund managers have raced to capture the inflows. According to market research, Sanlam Investments East Africa has emerged as a top player in the sector, with some managers reporting rapid monthly inflows and market-leading growth in AUM. Money market funds still dominate, holding about Sh400 billion of the industry’s total, but fixed-income and special funds are nibbling into that dominance as more investors accept slightly longer durations for better returns.
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The CMA’s public statements that accompanied the figures stress that growth has been driven by “increasing awareness in the market to save and invest,” and by the regulator’s efforts to licence new players and products, there were 55 approved collective investment schemes by the end of September, 41 of which were active. The regulator also pointed to digital distribution and marketing as major catalysts for rapid new account openings.
Risks beneath the surface
Despite the excitement, experts warn of risks that accompany such fast expansion. Concentration in money-market and a few large managers means the industry could face liquidity strain if many investors try to exit simultaneously. Fee structures on some special funds can be complex; without transparency, retail investors may end up paying higher costs than they realise.
And while asset growth is impressive on paper, the sector still represents a modest share of GDP compared with mature markets, highlighting both upside potential and the work needed to deepen Kenya’s capital markets. Cytonn’s note recommends continued innovation, fee optimisation, and stronger product diversification to ensure sustainable growth.
What to watch next
Investors and policymakers will be tracking several things in the coming months: whether inflows remain steady or prove cyclical; the appetite for equity and balanced funds (critical for long-term capital markets development); how well managers and trustees handle rising numbers of small retail accounts; and the CMA’s regulatory moves as it licenses more schemes and pushes for investor protection.
The ability of managers to convert marketable paper into meaningful long-term investment will determine whether the boom becomes durable capital-market deepening, or a short-lived asset-gathering cycle.
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