If you’ve been following Kenya’s investment space, you’ve probably noticed one trend that’s impossible to ignore—the rise of USD-denominated funds. In a market where the shilling continues to weaken against the dollar, savvy investors are increasingly turning to dollar-based investments to preserve and grow their wealth.
Among these, money market funds (MMFs) stand out for their combination of safety, liquidity, and consistent returns. While many investors know about the likes of CIC, Absa, or Jubilee USD MMFs, a relatively new entrant is quietly carving out a niche: the Kuza Money Market Fund USD.
Launched in December 2022, this fund by Kuza Asset Management offers investors a unique opportunity to access a low-risk, diversified USD-denominated portfolio.
With yields that consistently beat local dollar deposit rates, it’s proving to be a competitive option for both local investors and the diaspora community looking to hedge their savings.
So, what exactly is the Kuza USD MMF, how does it work, and is it worth your money? Let’s break it down in simple, practical terms.
What is the Kuza Money Market Fund USD?
The Kuza Money Market Fund USD is a Collective Investment Scheme (CIS) licensed by Kenya’s Capital Markets Authority (CMA). This simply means that Kuza pools money from multiple investors and manages it collectively in short-term, low-risk dollar assets.
It is designed for investors who want:
- To protect their wealth in US dollars,
- To earn competitive returns without taking on high risk, and
- To enjoy liquidity with a predictable monthly income.
Launched in December 2022, the fund is managed by Kuza Asset Management, with the Co-operative Bank of Kenya acting as the trustee and Kenya Commercial Bank (KCB) serving as the custodian.
In short, it’s a dollar-based “parking bay” for your money that earns you better returns than leaving dollars idle in a current account.
Key Fund Facts at a Glance
Here’s a quick snapshot of the Kuza USD MMF as of August 31, 2025:
| Feature | Details |
| Fund Structure | Collective Investment Scheme |
| Currency | USD |
| Effective Annual Yield | 5.73% |
| Assets Under Management (AUM) | $1.76M |
| Minimum Investment | $100 |
| Minimum Top-up | $50 |
| Management Fee | 2% per annum |
| Trustee | Co-operative Bank of Kenya |
| Custodian | Kenya Commercial Bank (KCB) |
| Inception Date | December 2022 |
| Lock-in Period | 2 weeks |
| Distribution Frequency | Monthly |
This low entry point makes it accessible even for small investors who want to start building USD wealth gradually.
Investment Objective
The primary goal of the Kuza USD MMF is to deliver short- to medium-term capital growth while protecting investors’ capital.
This dual objective is what makes money market funds attractive—they don’t aim for aggressive growth like equity funds but instead focus on stability, predictability, and reliable income.
Kuza achieves this by carefully investing in a broad spread of USD-denominated fixed-income securities, including:
- Eurobonds: These provide attractive yields compared to local deposits, while still being backed by sovereign or corporate issuers.
- Fixed deposits and call deposits: These ensure liquidity and safety while earning stable returns.
- Corporate bonds and commercial papers: These add diversification, spreading risk across different issuers and instruments.
This structure makes the Kuza USD MMF ideal for investors who are not chasing risky, high-volatility gains but instead want a steady dollar return. In today’s environment—where the Kenyan shilling has lost significant value against the dollar—having part of your wealth in a fund that aims to grow capital in USD can be a game-changer.
Another key part of the investment objective is inflation-beating returns. By offering 5.73% as of August 2025, Kuza USD MMF comfortably outpaces the average return on a dollar savings account in Kenyan banks, which typically ranges from 1–3%.
For both local and diaspora investors, this makes it a far more productive place to park funds.
Performance Snapshot
Performance is what truly sets the Kuza USD MMF apart.
As of August 2025, the fund delivered an effective annual yield of 5.73%, which is significantly higher than the benchmark rate of 3.13% based on Kenya’s commercial banks’ average 3-month USD deposit rate.
But the story gets even better when you look at how Kuza has performed across different time horizons:
| Period | Kuza USD MMF | Benchmark (USD Deposit Rate) |
| Quarter-to-Date | 5.63% | 3.19% |
| Year-to-Date | 6.07% | 3.04% |
| 1-Year | 6.38% | 3.13% |
These numbers highlight three important points:
- Consistency – Kuza USD MMF has outperformed its benchmark across every period measured.
- Attractiveness – With yields nearly double those of bank deposits, it’s clearly a more rewarding way to hold dollars.
- Resilience – Even in times of global uncertainty, the fund has maintained competitive returns, proving its ability to manage risk effectively.
For investors used to earning little or nothing on their dollar balances, this performance alone is a strong reason to take a closer look at Kuza.
Asset Allocation Strategy
A fund’s performance is only as strong as its underlying investments. Here’s how Kuza USD MMF’s portfolio looked as of August 2025:
- Eurobonds – 54%
- Cash & Bank Deposits – 38%
- Corporate Debt – 8%
This allocation shows a deliberate strategy. By placing more than half of the portfolio in Eurobonds, Kuza taps into instruments that tend to offer higher yields than local bank deposits, especially in emerging markets.
At the same time, 38% in cash and bank deposits ensures the fund can meet redemption requests and provide liquidity without stress. The smaller allocation to corporate debt adds another layer of diversification, helping balance risk and return.
This blend reflects a philosophy of capital preservation first, income generation second—exactly what a money market fund should do. It ensures investors’ dollars are not exposed to reckless risk while still generating returns that make the investment worthwhile.
Why Consider the Kuza Money Market Fund USD?
When deciding where to place your hard-earned dollars, you need more than just numbers—you need reasons. Here’s why Kuza USD MMF deserves your attention:
- Dollar Denomination: With the Kenyan shilling losing value year after year, holding part of your wealth in USD is a smart hedge. This fund gives you that dollar exposure without the complexity of trading forex.
- Attractive Returns: Earning 5.73% beats leaving money in a USD bank account. Your dollars work harder for you here.
- Passive Income: The monthly distribution makes it ideal for retirees, diaspora investors, or anyone seeking regular cash flow.
- Liquidity: With a lock-in of just two weeks, you’re not tied down for long. You can access your money relatively quickly compared to other dollar investment vehicles.
- Low Risk: Classified as a low-risk investment, Kuza USD MMF avoids risky speculation. It focuses on secure, income-generating instruments.
- Accessibility: With a minimum entry of just $100, it’s open to almost anyone. Whether you’re a student starting to save or a professional diversifying your portfolio, you can participate.
In short, Kuza USD MMF combines safety, income, and accessibility in a way that few other dollar investments in Kenya currently do.
Growth & Market Position
Kuza may not yet be among the largest players in Kenya’s fund management space, but its growth trajectory is remarkable.
- The Kuza Unit Trust Scheme reported assets under management (AUM) of Ksh 2.7 billion as of June 2025, up 42% from Q1 2025.
- The Kuza USD MMF alone managed $240.1 M in AUM by June 2025, reflecting strong demand for its dollar-based strategy.
- More broadly, foreign currency-denominated funds across Kenya now control KSh 62.1 billion in AUM, representing 10% of the entire collective investment schemes (CIS) market.
This signals two things: first, Kuza is gaining traction among investors, and second, dollar funds are no longer a niche—they are becoming mainstream.
As more Kenyans and diaspora investors seek protection against shilling depreciation, funds like Kuza USD MMF are well-positioned to ride the wave.
Comparing Kuza USD MMF with Other USD Funds
No investment decision is complete without a comparison. Here’s how Kuza stacks up against other leading USD MMFs:
| Fund | Effective Yield (2025) | AUM (June 2025) | Minimum Investment | Custodian |
| Kuza USD MMF | 5.73% | $240M | $100 | KCB |
| CIC USD MMF | ~5.5% | $4.29B | $1,000 | Co-op Bank |
| Jubilee USD MMF | ~6.0% | $2.61B | $1,000 | Equity Bank |
| Absa USD MMF | ~5.8% | $2.30B | $1,000 | Absa Bank |
| Old Mutual USD MMF | ~5.5% | $1.44B | $500 | Standard Chartered |
While Kuza’s fund size is smaller compared to the big players, it has three clear advantages:
- Competitive yield (outperforming most peers).
- Low entry barrier ($100 vs $500–$1,000 for most competitors).
- Strong Eurobond allocation, which is a differentiator for returns.
For smaller investors or those testing USD waters for the first time, Kuza is an appealing option.
Who Should Invest in the Kuza USD MMF?
The Kuza USD MMF is versatile enough to serve multiple investor profiles:
- Diaspora Kenyans: You can send money back home and park it safely in USD, avoiding conversion into shillings until needed.
- Local professionals & high-income earners: If you’re tired of your shillings losing value, this fund gives you a hedge in USD.
- Exporters and SMEs: If your business earns in USD, parking cash here helps you earn returns while waiting to pay suppliers.
- Parents: Building a dollar-denominated education fund ensures your child’s overseas tuition is safeguarded.
- Retirees: The monthly income provides a steady cash flow without exposing you to big market risks.
Essentially, anyone who values stability, dollar exposure, and consistent returns is a good fit for Kuza USD MMF.
Risks and Considerations
No investment is perfect, and Kuza USD MMF is no exception. Here are the main risks to keep in mind:
- Currency Risk: While the fund shields you from shilling depreciation, you’re still exposed to global USD inflation.
- Liquidity Restriction: Unlike a current account, you can’t withdraw instantly. There’s a mandatory two-week lock-in.
- Market Risk: Yields fluctuate depending on bond and deposit market conditions. They are not fixed.
- Fund Size: Compared to giants like CIC or Jubilee, Kuza is still relatively small, which could impact economies of scale.
- Regulatory Disclaimer: CMA regulates the fund, but it does not guarantee its financial soundness.
These risks don’t make the fund unattractive, but they are worth weighing before investing.
Practical Use Cases
Here are ways investors are actively using Kuza USD MMF:
- Diaspora remittances: Instead of sending money directly into current accounts, investors channel funds into Kuza USD MMF to grow them until they’re needed.
- Education savings: Parents preparing for international school or university fees in dollars find it useful for accumulating USD over time.
- SMEs with USD receivables: Exporters, consultants, or service providers receiving USD can safely earn interest while holding funds.
- Wealth diversification: High-net-worth individuals looking to balance KES-heavy portfolios by allocating part of their wealth into dollar-denominated instruments.
By tailoring it to personal or business needs, investors can maximize the fund’s utility.
How to Invest in Kuza USD MMF
Investing in the Kuza USD MMF is simple and straightforward:
- Open an account with Kuza Asset Management, either online via their platform or through direct engagement.
- Fund your account with USD, observing the minimum entry of $100.
- Top up as you go, with contributions as low as $50.
- Wait two weeks—the lock-in period—before you can redeem.
- Enjoy monthly distributions, either withdrawing for income or reinvesting to compound growth.
This ease of access makes it practical even for small investors, while still robust enough for businesses or high-net-worth individuals.
Growth Opportunities
Looking ahead, the Kuza USD MMF stands on fertile ground for growth. Several factors are working in its favor:
- Rising diaspora inflows: Kenya receives over $4B annually in remittances, much of it in USD. Funds like Kuza offer a natural home for these inflows.
- Investor demand for hedging: With the Kenyan shilling under pressure, more locals want USD exposure.
- Expanding CIS industry: Collective investment schemes grew their AUM by 20% in Q2 2025 alone, reflecting rising popularity.
- Small fund advantage: Kuza has room to grow. At $1.76M AUM, there’s significant headroom compared to larger peers.
With smart marketing, improved digital onboarding, and continued performance, Kuza could quickly become a household name in Kenya’s dollar fund space.
FAQs
Is my capital guaranteed in Kuza USD MMF?
No, your capital isn’t guaranteed. However, the fund is classified as low-risk and invests in safe fixed-income securities like Eurobonds and bank deposits, which reduces risk significantly.
How does it compare with a USD savings account?
Most USD savings accounts in Kenya offer 1–3% returns, while Kuza USD MMF is delivering 5.73% as of August 2025. That’s nearly double or triple the return.
What is the redemption process like?
Redemptions are allowed after the 2-week lock-in period, and once initiated, payouts typically take a few working days to process.
Are the returns taxed?
Yes. Returns are subject to withholding tax under Kenyan law. The yields quoted are net of management fees but gross of tax.
Can I reinvest my monthly distributions?
Yes, investors can choose to withdraw income monthly or reinvest distributions to compound returns. Reinvestment is often the better strategy for long-term wealth growth.
Conclusion – Is the Kuza USD MMF Worth It?
The Kuza Money Market Fund USD may still be in its early stages compared to big names like CIC or Jubilee, but it has all the right ingredients to become a strong contender.
For investors looking to protect wealth against shilling depreciation, grow USD savings, or generate passive monthly income, Kuza USD MMF is a smart and practical option.
The fund’s growth in just under three years is a clear sign that demand is strong and rising. While it comes with minor risks like the two-week lock-in and smaller fund size, these are outweighed by the benefits.
So the question is no longer whether Kuza USD MMF works—it does. The real question is: Are you ready to let your dollars do more than just sit idle?
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