5 Things to Consider Before Investing in a Special Fund in Kenya

Kenya’s investment landscape has grown far beyond the traditional money market fund. Over the past few years, “Special Funds” — a category of Collective Investment Schemes (CIS) regulated by the Capital Markets Authority (CMA) — have attracted growing attention from investors looking for returns that outpace inflation, treasury bills, and standard money market products. These funds often use more sophisticated strategies, including multi-asset and long/short trading models, to chase higher growth.

But higher potential returns almost always come with trade-offs. Before you commit your capital to a special fund, here are five things worth thinking through carefully.

1. Understand the Fund’s Risk Rating and Strategy

Special funds are not money market funds. While a money market fund typically parks your cash in short-term, low-risk instruments like treasury bills and fixed deposits, a special fund may actively trade across stocks, bonds, currencies, commodities, and derivatives — sometimes on international exchanges. This active, multi-asset approach can generate stronger returns, but it also introduces market volatility and trading risk that a conservative investor may not be used to.

Before investing, ask the fund manager for the official fact sheet and check its risk rating (most CMA-regulated funds are rated on a 1–5 scale). Understand exactly what the fund invests in, how much of its portfolio sits in equities versus fixed income, and whether it hedges against downside risk. A fund that promises attractive returns should also be able to clearly explain how it manages risk during turbulent markets.

2. Check the Minimum Investment and Liquidity Terms

Special funds typically require a higher minimum investment than money market funds — often in the range of KES 100,000 to KES 250,000 or more, with defined minimum top-up amounts. This makes them less accessible for small, first-time investors and more suited to those with a larger lump sum or an existing investment portfolio.

Equally important is liquidity — how quickly you can access your money if you need it. Some special funds process withdrawals within 48–72 hours, while others may have longer notice periods or penalties for early withdrawal. If you may need access to your funds on short notice, factor this into your decision.

3. Look at the Fee Structure Closely

Special funds often charge more complex fees than plain vanilla money market funds. Common charges include an annual management or financial services fee (often around 2–5% per annum, pro-rated), plus a performance fee charged on returns above a set “hurdle rate.” For example, a fund might only charge a performance fee once returns exceed 20–25% in a year, and take a cut — commonly around 10% — of everything earned beyond that threshold.

These fees can meaningfully affect your net returns, so don’t just look at headline performance numbers. Ask for a breakdown of all applicable charges, including any redemption fees, and calculate what your actual take-home return would look like after fees.

4. Review the Track Record — But Don’t Rely on It Alone

Past performance is a useful indicator of how a fund has navigated different market cycles, but it’s not a guarantee of future results — especially for funds that trade actively in volatile markets like global equities, currencies, and commodities. Look at how the fund has performed not just in strong years, but during downturns or periods of high market uncertainty. A fund that protects capital reasonably well during bad years, alongside strong gains in good years, tends to be more reliable than one with spectacular but inconsistent returns.

It’s also worth checking who is behind the fund: the fund manager’s experience, the trustee, the custodian bank, and the auditor. Regulatory oversight by the CMA is a baseline requirement, but the quality and experience of the team managing your money matters just as much.

5. Match the Fund to Your Financial Goals and Currency Needs

Some special funds are offered in both Kenya Shilling (KES) and US Dollar (USD) denominations, and increasingly, Shariah-compliant options are also available. If you’re saving for a goal denominated in USD — such as school fees abroad or dollar-based expenses — a USD-denominated fund may help you earn returns while also hedging against shilling depreciation. On the other hand, if your financial goals are shilling-based, a KES fund keeps things simpler.

Think about how a special fund fits into your broader portfolio. Financial advisors generally recommend that higher-risk products like special funds complement, rather than replace, more stable holdings like money market funds, treasury bonds, or fixed deposits. Diversification across risk levels — not just asset classes — is key to long-term financial resilience.

A Quick Look at Mansa-X

One special fund that has drawn significant attention in Kenya’s market is Mansa-X, a multi-asset special fund managed by Standard Investment Bank (SIB) under the Standard Investment Trust Funds, and regulated by the CMA. Launched in January 2019, Mansa-X uses a long/short trading strategy across global stock exchanges — including the NYSE, LSE, Frankfurt, and Hong Kong exchanges — alongside commodities, currencies, and fixed income instruments. It is available in both KES and USD denominations, as well as Shariah-compliant versions, and has grown to become one of the largest special funds in the country by assets under management. As with any special fund, it carries more risk than a money market fund, so it’s worth reviewing its fact sheet, fee structure, and risk rating directly with SIB before deciding if it fits your investment goals.

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Read Also: Understanding Special Funds: What Mansa-X Tells Us About Kenya’s Changing Investment Landscape