In a market where inflation, interest rates, and liquidity conditions shift quickly, investors are placing a higher premium on stability combined with meaningful returns. Traditional fixed deposits rarely beat inflation, and money market funds—while highly liquid—are not always optimized for slightly longer-term goals that require better yields.
The Madison Fixed Income Fund fills this important gap.
It is designed for investors seeking stable, predictable returns, a moderate risk profile, and consistent outperformance compared to the 91-day Treasury Bill. With a current daily yield of 10.78% and an effective annual yield of 11.38%, this fund stands out as a reliable, well-constructed vehicle for income and moderate capital growth.
What Is the Madison Fixed Income Fund?
The Madison Fixed Income Fund is an open-ended unit trust that invests in a diversified fixed-income portfolio consisting of government securities, high-quality corporate bonds, fixed deposits, and select offshore instruments.
Its objective is simple:
To generate a steady income and preserve capital while delivering moderate growth.
It offers:
- Better yields than traditional fixed deposits
- Professional management
- Diversified fixed-income exposure
- Lower volatility compared to equity-focused investments
- Monthly income distribution
It is classified as moderate risk, making it suitable for investors who want a balance between return and stability.
Fund Snapshot – Key Facts at a Glance
| Item | Detail |
| Fund Name | Madison Fixed Income Fund |
| Structure | Open-ended Unit Trust |
| Registration Date | 15th June 2022 |
| Fund Manager | Madison Investment Managers Ltd |
| Trustee | Standard Chartered Bank Kenya Ltd |
| Custodian | Standard Chartered Bank Kenya Ltd |
| Auditor | Grant Thornton Kenya |
| Currency | Kenya Shilling (KES) |
| Minimum Initial Investment | KES 5,000 |
| Minimum Top-Up | KES 1,000 |
| Management Fee | 2% p.a. |
| Benchmark | Average 91-Day T-Bill + 1% |
| Income Distribution | Monthly |
| Lock-in Period | 3 Months |
| Risk Profile | Moderate |
| Fund Size (AUM) | KES 2.55 Billion (Oct 2025) |
Latest Yields and Performance
The yield rates as of 17th November 2028 were as follows:
- Daily Yield: 10.78%
- Effective Annual Yield: 11.38%
At an effective annual yield of 11.38%, an investment of KES 1,000,000 today could grow to approximately KES 1,113,800 in one year—before withholding tax.
This is significantly stronger than what many fixed deposits offer, especially after adjusting for inflation and taxation.
Investment Strategy and Structure
The Madison Fixed Income Fund is designed for both income generation and moderate capital appreciation. Its strategy combines government securities, fixed deposits, and corporate bonds, striking a balance between safety and above-average yield potential.
The strategy focuses on:
- Liquidity
- Credit safety
- Duration management
- Steady monthly income
- Benchmark outperformance
- Protected downside risk
It is designed for investors seeking predictable performance with minimal surprises.
Portfolio Composition – What the Fund Invests In
The asset allocation from the October 2025 factsheet is as follows:
| Asset Class | Allocation |
| Government Securities | 63.1% |
| Fixed Deposits | 28.6% |
| Corporate Debt | 8.2% |
Government Securities – 63.1%
They provide:
- High credit safety
- Predictable coupon income
- Portfolio stability
- Reduced volatility
This is the anchor of the fund’s risk profile.
Fixed Deposits – 28.6%
These deposits:
- Offer consistent and predictable interest
- Enhance liquidity
- Support portfolio rebalancing
- Cushion the portfolio when bond prices fluctuate
Corporate Debt – 8.2%
This section boosts returns while remaining selective and conservative:
- Only high-quality corporate issuers
- Tight credit controls
- Modest allocation to manage risk
The combination of all three creates a balanced return engine.
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Risk Profile and Duration Dynamics
The fund’s risk profile is Moderate, reflecting limited volatility due to its heavy exposure to government securities, combined with strategic allocations to deposits and corporate bonds.
Key Risk Characteristics
- Weighted Average Duration: ~3.8 years
- Interest Rate Sensitivity: Moderate
- Credit Risk: Low for government securities; controlled for corporate issuers
- Liquidity Risk: Reduced due to deposit allocation
The fund aims to deliver predictable outcomes in various rate environments.
Who the Madison Fixed Income Fund Is Best Suited For
This fund is ideal for investors who want:
- Regular monthly income
- Stability with moderate growth
- A safer alternative to equities
- Better yields than fixed deposits
- A smart transition from money market funds
- A medium-term investment solution (3–24 months)
It is not designed for speculative investors, day traders, or individuals with ultra-short liquidity needs (under three months).
Role of the Madison Fixed Income Fund in a Wealth Strategy
The Madison Fixed Income Fund can serve as:
- An income generator
- A medium-term savings tool
- A capital buffer
- A stabilizer in a diversified portfolio
- A reserve for near-term financial goals
- A superior alternative to short-term fixed deposits
It works particularly well in conjunction with money market funds, retirement portfolios, and long-term investment assets.
How to Invest in the Madison Fixed Income Fund
- Visit the Madison Investment Managers website
- Open the Madison Fixed Income Fund page
- Read the IM and factsheet
- Fill out the application form (online or downloadable)
- Provide KYC documents (ID, KRA PIN, proof of address)
- Make the minimum deposit of KES 5,000
- Top up from KES 1,000 anytime
- Track your monthly updates
- Redeem after the 3-month lock-in (if needed)
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Frequently Asked Questions
What exactly is the Madison Fixed Income Fund?
It is a unit trust that invests in government securities, corporate debt, and fixed deposits to generate steady income while preserving capital. It is actively managed and designed for moderate-risk investors seeking consistent returns.
What yields does the Madison fixed-income fund currently offer?
Based on your updated figures, the fund is currently yielding 10.78% daily and 11.38% effective annually. These yields fluctuate with prevailing interest rates but generally outperform fixed deposits and short-term T-bills.
Is the Madison Fixed Income Fund safe?
The Madison fixed income is considered to have moderate risk. Most of the portfolio is in government securities, which are highly secure. Corporate exposure is controlled and modest. While bond prices can fluctuate in response to interest rate changes, the fund prioritizes capital preservation and steady income.
What is the minimum time I should stay invested in the Madison Fixed Income Fund?
There is a 3-month lock-in period, and the ideal investment horizon is 3–24 months. Longer periods allow you to benefit from compounding and stable interest accrual.
Does the Madison Fixed Income Fund pay income monthly?
Yes, income is distributed monthly, giving investors a reliable cash flow. You can withdraw the income or reinvest it for compounding.
Are there any fees?
The fund charges a 2% annual management fee, accrued daily. Income is taxable at 15% withholding tax. There are no initial or exit fees shown on the factsheet.
Final Thoughts
If you want a Kenya Shilling investment that provides predictable income, moderate growth, and controlled risk, the Madison Fixed Income Fund is a strong contender. With current yields around 11.38%, a diversified portfolio, and solid governance, it provides meaningful value for conservative and income-focused investors.
Whether you’re saving for short-term goals, holding corporate cash, or building a low-volatility income stream, this fund aligns well with a disciplined financial strategy. If paired with money market funds, life insurance, retirement planning, and long-term investments, it becomes an essential building block of a financially secure future.
