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Market Commentary
Key Features
Fund Manager | CIC Asset Management Ltd |
Launch Date | Jun - 11 |
Risk Profile | Moderate |
Trustee | Kenya Commercial Bank |
Custodian | Co-op Custodial Services |
Auditors | PWC |
Minimum Investment | Ksh 5,000.00 |
Minimum Additional Investment | Ksh 1,000.00 |
Initial Fee | Nil |
Annual Management Fee | 2.00% |
Distribution | Semi-Annual |
Assets Under Management | KES 159.8 Million |
Fund Objective
Medium to long-term investments
Extra returns at moderate risk.
Reasonable return from a well-diversified portfolio of fixed income securities.
Asset Allocation
GDP
GDP growth slowed to 4.6% in Q2 2024, down from 5.6% recorded in Q2 2023. This slowdown mainly reflected deceleration in growth in most sectors of the economy. Some sub-sectors in industry contracted, underscoring the challenges to growth stemming from low government spending and consumer demand as well as sticky input prices. Overall, the economic growth outturn for 2024 is thus far slower than earlier projected and we see GDP growth could remain weak to end-year.
Inflation
Overall inflation recorded a marginal increase to 2.8% in November from 2.7% in October 2024; general prices rose by 0.3%. The lower inflation levels thus far provide sufficient room for further monetary policy easing ;as the focus is now slowly shifting from price stability to stimulation of aggregate demand.
Interest Rates
In the first week of December, the Monetary Policy Committee voted to lower the policy rate from 12% to11.25%, noting that its previous measures have maintained exchange rate stability and anchored inflation. It urged banks to take the necessary steps to lower their lending rates in order to stimulate credit to the private sector and subsequently economic activity. The short term papers closed the quarter at 11.25%, 11.34% and 12.49% for the 91, 182 and 365 day papers respectively.
Outlook
An improved performance is expected for the fund as new inflows and maturities come in which will be reinvested at higher yields in the current interest rate environment. The fixed income fund will face some negative valuation movements as rates on government securities continue rising but is however anticipated to register gradual increment in gains as we continue taking advantage of the higher rates. The fund provides an opportunity for investors with low liquidity needs to lock in higher returns.
Fund
Performance
Nairobi Security Exchange
yield curve
Statutory Disclaimer: The value of units may go down as well as up and past performance is not necessarily a guide to the future. There are no guarantee on the client’s capital as the performance of units in the fund is determined by change in the value of underlying investments hence value of your unit trust investment
