The Capital Markets Authority (CMA) has issued a public advisory to Kenyans investing in Money Market Funds (MMFs), buying shares or growing their money in the capital markets.
In a Public Service Announcement on Tuesday, July 15, the authority advised Kenyans to conduct their due diligence when planning to invest in these markets to avoid being swindled.
It warned of fraudsters masquerading as licensed firms who ensnare unwitting victims with promises of higher, unrealistic returns on their investments.
CMA urged Kenyans seeking to invest to first verify the details of the firms they intend to engage on its official website and other channels. The authority also clarified that it does not seek any payments through WhatsApp or SMS messages.
"As you plan to invest in money market funds or grow your money in the capital markets, take a moment to protect your hard-earned money," the authority warned.
"The Capital Markets Authority (CMA) urges investors to be cautious of fraudsters posing as licensed firms or promising unrealistic returns. Remember, CMA never asks for payments through WhatsApp or SMS. Always verify licensed entities through the official website, and if you have any concerns, reach out via DM or email us at complaints@cma.or.ke. Invest smart! Stay alert!"
This comes even as Kenyans continue to flock to the MMFs as an investment solution following MMFs growing popularity in the past few years.
An MMF is a unit trust fund managed by a professional fund manager, providing investors with a safe place to keep their cash while earning a return. It offers higher returns as compared to regular bank deposits.
Just over a week ago, CMA released the Collective Investment Schemes (CIS) Quarterly Report, which listed the leading MMFs by total assets under management (AUM) in Kenya.
CIC Money Market Fund recorded the highest AUM at Ksh81.8 billion, representing a 25.6 per cent market share. It was closely followed by Sanlam Money Market Fund at Ksh72.2 billion, a 22.6 per cent market share.
ICEA Lion Money Market Fund closed the top three with Ksh20.1 billion. ABSA Shilling Money Market Fund had Ksh19.2 billion and rounding off the top five was the Co-op Money Market Fund at Ksh16.3 billion, all below seven per cent of the market share.
Aside from MMFs, other forms of AUM held in various unit trusts included fixed income funds, equity funds, balanced funds, and special funds.
