
Appetit For Risk? Here are Special Funds in Kenya Offering Returns of Up to 45% Per Annum
For investors in Kenya seeking high-yield opportunities and with a risk appetite, special funds offer a compelling investment avenue.
These funds, managed by experienced professionals, are tailored to provide significant returns while navigating a complex landscape of risks. Here’s a look at some notable special funds in Kenya and why they might be a good fit for your investment portfolio.
1. Oak Special Fund by Faida Investment Bank
Launched in the first quarter of 2024, the Oak Special Fund is a newcomer to the market but has already made significant strides. By January 2025, it crossed the Ksh 1 billion mark in Assets Under Management (AUM).
- Minimum Investment: Ksh 500,000
- Top-Ups: Ksh 50,000
- Notable Highlight: Inspired by recommendations from financial expert Rina Hicks, many investors joined this fund early and are already reaping the benefits.
- Estimated Returns: Information on specific return percentages is yet to be disclosed due to its newness, but its rapid growth indicates solid performance potential.
2. Mansa X by Standard Investment Bank (SIB)
Mansa X is a well-established player in the special funds space, boasting impressive metrics.
- Minimum Investment: Ksh 250,000
- Assets Under Management (AUM): Ksh 46 billion
- Asset Value: Ksh 22 billion
- Notable Highlight: Over two years, this fund has delivered consistent performance, making it a popular choice for investors seeking high returns in a managed risk environment.
- Estimated Returns: Though specific figures vary, Mansa X has been recognized for its robust growth and ability to weather market volatility.
3. Kuza Momentum Fund by Kuza Asset Management
Known for its high annual returns, the Kuza Momentum Fund is another attractive option for seasoned investors.
- Minimum Investment: Ksh 250,000
- Estimated Returns: A remarkable 45% per annum
- Notable Highlight: Kuza’s strategy focuses on diversified investments and meticulous risk management to ensure maximum returns for its investors.
As an investor, some of the advantages of investing in Special Funds include;
- Regulatory and Trustee Oversight – Special Funds operations are monitored by the Capital Market Authority (CMA). Fund Managers are obligated to file monthly reports with the CMA to ensure that investors’ funds are invested according to the investment guidelines set by the Authority. Additionally, the fund also has an independent trustee who ensures that the fund is managed in accordance with the applicable laws and regulations and in general with the requisite due diligence and care which is done through exercising oversight on the Fund Manager. This ensures that Investors’ funds are protected,
- Professional Fund Management – Special Funds are managed by professional fund managers with significant expertise and experience accrued over a period of time. This means that an investor does not need to have market or financial knowledge in regard to their investment because the fund manager ensures that investments are made based on comprehensive research and analysis coupled with sound risk management strategies,
- Higher Returns – A Special Fund has the ability to take concentrated positions in sectors or securities that represent the most attractive opportunities in terms of; higher rates of return compared to Traditional Investment Options, an inflation hedge, and, capital appreciation. This is achieved through intensive market and financial research that seeks to identify the investments options with the highest returns at a certain level of risk. Despite the high returns, investment in special fund tend to come with high risk, and,
- Diversification – Special Funds give investors the opportunity to diversify their portfolio, as a result of access to a wide range of securities such as Commodities and Derivatives, which would have otherwise been inaccessible if they invested on their own. The diversification of investments by Special Funds enable capital growth and provide exposure and ultimate high returns from sectors or securities with higher yields.
Understanding the Risks
While the potential for high returns is enticing, it’s crucial to understand the risks associated with special funds. These include:
- Liquidity Risk: Investments in illiquid assets, such as real estate, can make it challenging to access your funds quickly.
- Credit Risk: The possibility of defaults can impact returns.
- Foreign Exchange Risk: Fluctuations in currency values can affect the performance of investments with exposure to international markets.
- Interest Rate Risk: Changes in interest rates can impact the valuation of fixed-income investments.
Fund managers play a vital role in mitigating these risks through strategic planning and diversification, ensuring the safety and growth of investors’ capital.
Should You Invest?
If you have a high risk appetite and are willing to embrace market volatility for the promise of significant returns, special funds could be a rewarding addition to your portfolio.
Their ability to deliver exceptional growth, as seen in the case of Kuza Momentum Fund’s 45% annual return, makes them stand out among other investment options.