According to one money market fund study by Cytonn, the Nabo Africa money market fund is the 3rd highest-yielding and the 4th fastest-growing money market fund in the country. Unsurprisingly, its performance curve has been rising steadily since launching in 2007.
As of 9th December 2022, Nabo Africa had an effective annual yield of 9.4%, according to another Cytonn report, which is pretty impressive. Cytonn, Zimele, and NCBA money market funds lead the chase, with a yield rate of 10.7%, 9.9%, and 9.8%, respectively.
So, there’s no doubt about Nabo Africa’s fast growth, given that the money market fund is only five years old. What most people are too critical about are the fund’s Ksh 1,000,000 minimum investment limit and Ksh 10,000 minimum top-up.
Unsurprisingly, most people overlook the fund as few Kenyans can afford to raise Ksh 1 million.
But why pay that much? Is Nabo Africa worth the effort? I’ll answer that, among many other concerns.
Here’s an outline of what I’ll cover about the Nabo Africa money market fund (Nabo Africa MMF):
- What is the Nabo Africa money market fund?
- How does Nabo Africa MMF work?
- Who should invest in the Nabo money market fund?
- Why invest in Nabo Africa MMF?
- What are the downsides of the Nabo Africa money market fund?
- How do I join Nabo Africa MMF?
- How do I withdraw from Nabo Africa MMF?
Let’s jump into it!
In a hurry? Below is a Nabo Africa MMF fact sheet to give an overview of the fund:
Nabo Africa Money Market Fund Fact Sheet
|Fund Structure||Unit Trust|
|Fund Size||Ksh 1.3 billion (as of march 2022)|
|Reporting Currency||Kenya Shilling|
|Fund Manager||Nabo Capital Limited|
|Portfolio Manager||Charles Miano|
|Minimum Investment||Ksh 1 million|
|Minimum Top-Up||Ksh 10,000|
|Effective Annual Rate||9.4% (as of 9th December 2022)|
|Benchmark||3-Month Treasury Bill|
|Annual Management Fee||2.5%|
|Risk Profile||Low risk|
What Is the Nabo Money Market Fund?
The Nabo money market fund is a unit trust product by Nabo Capital that invests in a diversified portfolio of low-risk, short-term instruments and debt securities that promise high liquidity and capital preservation.
The portfolio includes corporate debt, cash, and cash equivalent, among other securities. Nabo Africa MMF was established in November 2017 and currently enjoys a Ksh 1.3 billion fund size.
How Does the Nabo Capital Money Market Fund Work?
Nabo Africa MMF features a fund manager (Nabo Capital Limited) that creates the investment portfolio, invests the pooled money, and manages the fund.
The person taking the lead is Charles Miano (the Portfolio Manager). Mr. Miano is responsible for the day-to-day running of the money market fund. He is a critical decision-maker in managing the fund, but that doesn’t mean he works alone.
The fund manager doesn’t keep the pooled funds. That’s the job of a CMA (Capital Markets Authority) certified custodian (Stanbic Bank).
Another key player is the trustee (KCB Bank). KCB bank oversees the operations of the fund manager and reports any case of financial malpractice.
And the last piece of the ecosystem is the auditor (Grant Thornton). The auditor reviews Nabo Africa’s financial records, documents the report, and advises the fund manager accordingly.
I cannot forget to mention the unit holders (or the investors) where you fall in. Every unit holder earns interest from the money they pool, which as of December 2022, was 9.4%.
The interest earned is, however, charged a 15% withholding tax, while the account incurs an annual maintenance charge of up to 2.5%.
Interests are earned daily, which is a huge plus, and Nabo Africa invests a good chunk of the pooled money outside Kenya.
Who Should Invest in Nabo Money Market Fund?
Nabo Africa explicitly targets the following groups of people:
- Individuals seeking steady income
- Individuals looking to preserve capital
- Investors seeking to diversify their investment portfolio
- Those looking to save for emergencies (emergency fund), land/mortgage deposits, family/staff welfare, wedding plans, and vacations.
Why Invest in Nabo Money Market?
The Nabo Africa MMF has several advantages, making it worth considering as your next unit trust investment. They include:
- Low risk – Nabo Africa is CMA-approved, and a CMA-approved trustee (KCB) oversees its operations to guarantee safety. Moreover, the fund manager is experienced in studying the market and making the correct investment decisions.
- Higher returns – Given that the most recent Nabo Capital Money Market Fund Interest Rate is 9.4%, it’s pretty decent. Considering the minimum investment, you could get higher returns at the end of the month.
- High liquidity – According to Nabo Capital, you can access funds from your money market fund account within 48 hours, which is pretty fast.
- Daily compounding – You can withdraw cash anytime and have it in 2 days because the investment earns interest daily. The interest earned earns interest, which is what compound interest is about.
- Capital preservation – Nabo Capital recommends investing over three months to grow your capital correctly. So, it’s easy to preserve capital once you sign up for a money market fund account.
- Cash flow – Once you start earning interest, the cash starts flowing, and as long as the money market fund continues to make money, so will you.
What Are the Downsides of Nabo Capital Money Market Fund?
The Nabo Capital money market fund has a few downsides, which can be concerning. They are as follows:
- Higher minimum investment – Nabo Capital requires you to make a minimum investment of Ksh 1 million, which is beyond the reach of most Kenyans. Most money market funds in Kenya only need you to make Ksh 500 – Ksh 2000 deposits, while only a few ask for Ksh 5,000 – Ksh 10,000.
- Higher top-up limit – The minimum investment is not the only concern. Nabo Capital also expects you to make a top-up of Ksh 10,000 minimally, which makes it beyond most Kenyans’ reach.
How Do I Join Nabo Capital Money Market Fund?
Nabo Capital allows you to sign up for an account online using these steps:
- Visit nabocapital.com and click on the Invest Now tab
- Provide your name, contact, email, and subject information (about money market fund) and click submit
- Wait for Nabo Capital to reach out to you with further instruction
Alternatively, download the application form from the website and fill it out. Ensure you also provide all essential documents.
Here’s how to go about filling out the application form:
- First, download the application form
- Fill out the document checklist indicating the documents (ID/passport, birth certificate, and KRA pin copies) you’ll provide
- Fill out the investor details where you indicate if you are an individual, joint investor, or company and provide your personal information
- Indicate how you came to know about Nabo Capital, the source of your funds, and next of kin and beneficiary details
- Then fill out the investment detail (minimum investment of 1 million) and the investor bank details (the account you would want to receive the redemption)
- Sign the form, attach the indicated documents, and indicate the date for submitting the form
- Go ahead and deposit the funds using the following bank account details:
Account name – Nabo KES Money Market Fund Collection Account
Account number – 0100005089861
Bank – CFC Stanbic Bank
Branch – Kenyatta Avenue
Branch code – 31002
SWIFT code – SBICKENX
Nabo Capital Contacts
- Head Offices – International House, Mama Ngina Street Nairobi, 5th floor
- Mobile – 0709 902 700
- Email – firstname.lastname@example.org /email@example.com
- Facebook – www.facebook.com/NaboCapital
- Twitter – www.twitter.com/NaboCapital
- LinkedIn – ke.LinkedIn.com/company/Nabo-capital
- Instagram – www.instragram.com/NaboCapital
People Also Ask
1. Who Owns Nabo Capital?
Pius Muchiri, who also doubles up as the company CEO and managing director, founded Nabo Capital. Known as the Resident Bishop by his colleagues, Pius Muchiri has a deeply rooted spiritual life and is notable for his values. He holds a bachelor of Commerce degree, CFA charter, and CPA.
2. Is Nabo Capital Regulated?
Nabo Capital is regulated by the Kenya Capital Market Authority (CMA). CMA monitors all its operations to ensure they comply with all statutes. That’s part of why Nabo Capital money market fund and other investments are safe for investors.
3. How Do I Join Nabo Capital?
To join Nabo Capital, visit nabocapital.com, hit the Invest Now button, and fill out the short form. Nabo Capital will then get back to you with further instructions on the application.
4. What Does Nabo Capital Do?
Nabo Capital offers different investment funds, such as the money market fund, equity fund, fixed income fund, and balanced fund, allowing anyone with the financial muscles to invest.
There’s no doubt about the Nabo Capital money market fund’s performance and growth potential. The fund might be young in the industry, but as the metrics show, they are in to give the traditional big boys a fight.
Do you need any clarification about the Nabo Africa money market fund or any other investment opportunity in Kenya? The Cent Warrior family is here to help whenever we can. Talk to us on social media or sign up for our free personal finance guide, and you’ll get the help you need.