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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 118 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. The slowdown was seen across all economic sectors except manufacturing, wholesale and retail trade, health and professional services. The agriculture sector grew by 4.8% compared to 7.8% in Q2 2023. The services sector recorded a growth of 5.5% compared to 6.8% and contributed 3.1% to real GDP.
Inflation
Headline inflation rose for the first time in seven months, albeit marginally, to 4.4% in August from 4.3% in July 2024. The rise is largely attributable to higher fuel prices while food inflation decelerated m/m. We reiterate that we expect the annual inflation rate to oscillate within the mid-point (5.0%) of CBK’s target range supported by favourable weather.
Interest Rates
In early October, the Monetary Policy Committee voted to lower the policy rate to 12% from 12.75%, noting that its previous measures have lowered overall inflation to below the mid-point of the target range, stabilized the exchange rate; noting that there is scope further reductions in the coming months. The short term papers finished the quarter at 15.71%, 16.758% and 16.79% 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
