Cytonn Claims 0.8% Market Share in Regulated Funds Despite Challenges

Regulated funds managed by Cytonn Investments registered a 17 percent increase in the quarter ending March 2021, claiming a market share of 0.8 percent.

According to the Capital Markets Authority (CMA), despite Cytonn’s troubles in the unregulated products Cytonn High Yield Solutions (CHYS) and Cytonn Project Notes (CPN), it managed to increase the funds under management from 819.4 million in December 2020 to 960.2 million shillings.

The data from CMA show that in three years, the total assets held by Unit Trust Collective Investments Schemes (CIS) have risen by over 80 percent, crossing the 100-billion-shilling mark in December 2020.

In the first quarter of 2021, the funds grew 6 percent to hit 111 billion shillings.

“As of March 31, 2021, the total assets under management by the CIS were Sh111.09 billion, a significant 6.08 percent increase from Sh104.71 billion managed in the quarter ended December 31, 2020,” said CMA CEO Wyckliffe Shamiah.

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At 44.76 billion shillings, the CIC Unit trust Scheme carried the largest portion of the regulated funds with Britam Unit Trust Scheme following closely behind with 14.15 billion shillings in the period under review.

The Co-operative Bank of Kenya’s Unit Trust recorded the highest percentage increase at 36.22 percent. This is an equivalent of 1.3 billion shillings, up from 1 billion in the last quarter.

The highest decline was recorded by Amana Unit Trust funds. It recorded a 44.1 percent drop from 135 million shillings to 75 million shillings.

The CMA issued new guidelines in 2020 seeking more disclosures, updated asset valuations, and limits on investments in different asset classes.

CIS’s are approved pools of funds from the public and managed by licensed fund managers. They invest in diversified assets within restricted limits and are now widely available to the public.

These are small savers from as little as Sh5000 representing the broader economy and a wide range of aspiring individuals who lack the sophistication to invest in capital markets and so elect a unit trust to do so on their behalf.

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They are safe in that they diversify investment stocks, bonds, or other approved asset types, conduct regular audits, and have a fund manager, custodian, and a trustee licensed by the regulator.

The CMA issued new guidelines in 2020 seeking more disclosures, updated asset valuations, and limits on investments in different asset classes.