The NCBA Fixed Income Fund has built a strong reputation as one of Kenya’s most trusted income-generating investment vehicles. It appeals to investors who want to preserve capital, earn steady returns, and avoid the volatility of equities — all while keeping easy access to their money.
In a market where investors constantly juggle between returns and risk, the NCBA Fixed Income Fund stands as a middle ground. It offers better yields than savings or fixed deposits, yet remains safer than most market-linked investments.
As of 4 November 2025, the fund recorded a daily yield of 7.55% and an effective annual yield of 7.82%, positioning it among the most consistent performers in its class. Behind these numbers lies a disciplined investment strategy, strong governance, and a transparent structure that has earned the trust of investors.
Understanding the NCBA Fixed Income Fund
Every investor should begin with clarity — what exactly is this fund, how does it work, and who manages it? Let’s unpack its foundation and the players who keep it running efficiently and transparently.
Structure and Purpose
The NCBA Fixed Income Fund is a collective investment scheme designed to pool money from individual and institutional investors. That pool is then professionally managed and invested in a range of interest-bearing securities — primarily government bonds, Treasury bills, fixed deposits, and corporate debt instruments.
Its objective is straightforward: generate a steady income while preserving capital. This makes it ideal for investors seeking predictability and liquidity — two things many market-linked investments can’t promise.
Unlike equity funds that aim for growth through capital appreciation, fixed income funds like this one rely on interest income and coupon payments to grow investor wealth. Returns are distributed through unit price appreciation, meaning your investment grows quietly every day — even though you don’t see monthly payouts.
Governance and Key Stakeholders
The NCBA Fixed Income Fund operates under strict regulatory oversight from the Capital Markets Authority (CMA), ensuring full compliance with Kenya’s investment laws and reporting standards.
Here’s a snapshot of the fund’s governance structure:
| Role | Institution | Responsibility |
| Fund Manager & Promoter | NCBA Investment Bank Ltd | Oversees portfolio management, asset allocation, and compliance |
| Trustee | KCB Bank Kenya Ltd | Holds assets in trust for investors and ensures regulatory compliance |
| Custodian | Absa Bank Kenya PLC | Safekeeping of the fund’s cash and securities |
| Auditor | Deloitte & Touche LLP | Provides independent external audits |
| Regulator | Capital Markets Authority (CMA) | Licenses and supervises fund operations |
This structure offers strong investor protection. Funds are held separately from NCBA’s own accounts, and multiple oversight parties ensure transparency and accountability.
NCBA Fixed Income Fund Yields: What Investors Are Earning
The most common question investors ask is simple: “What’s the return?”
However, to interpret those numbers correctly, you must understand how yields are measured and what factors influence them.
Current Performance (as of 4 November 2025)
| Metric | Rate | Details |
| Daily Yield | 7.55% | Annualised from the fund’s daily return |
| Effective Annual Yield | 7.82% | Compounded over a full year |
| Quote Basis | Gross of withholding tax, net of expenses | |
| Management Fee | 2.0% per annum (already factored in) | |
| Update Date | 4 November 2025 | Most recent published data |
The daily yield shows how much the fund earned on that specific day, annualised to reflect what you’d get if the same performance continued for a year. The effective annual yield adjusts for compounding, providing a more realistic measure of what long-term investors can expect.
How Yields Are Generated
The fund’s income comes from interest payments and coupon earnings on bonds, Treasury bills, and fixed deposits. Returns are influenced by factors such as:
- Prevailing interest rates — higher rates typically boost yields.
- Bond maturities — longer maturities offer better returns but higher interest-rate sensitivity.
- Portfolio rotation — as older bonds mature, NCBA reinvests in new, higher-yielding securities.
- Operational efficiency — lower fees and better asset pricing enhance net yields.
Due to these moving parts, the fund’s yield fluctuates daily, but it remains within a narrow, stable range.
Illustrative Growth of Investment
| Investment Amount (KES) | Holding Period | Estimated Value (Before Tax) |
| 100,000 | 6 months | 103,800 |
| 100,000 | 1 year | 107,800 |
| 100,000 | 2 years | 116,300 |
| 100,000 | 3 years | 125,300 |
These figures illustrate how steady compounding builds wealth quietly. Even though the percentage may seem modest, the consistency — especially when compared to inflation and short-term bank rates — is where the real power lies.
Get Your Free Wealth Masterplan E-Book from CentWarrior Here!
Key Features, Fees, and Liquidity
Before investing your money in any fund, you should understand its terms — specifically, the minimum amount required to start, the ease of withdrawal, and the costs associated with staying invested.
Investment Terms
| Parameter | Details |
| Minimum Initial Investment | KES 1,000 |
| Minimum Top-up | KES 1,000 |
| Minimum Withdrawal | KES 1,000 |
| Recommended Holding Period | 1–36 months |
| Withdrawal Processing Time | T+2 working days |
| Income Distribution | Reinvested daily (via unit price growth) |
| Pricing Frequency | Daily (NAV-based) |
The fund’s low entry point of KES 1,000 makes it accessible to virtually anyone — from students and professionals to SMEs managing short-term liquidity.
Withdrawals take just two business days, which is a relatively fast processing time compared to traditional term deposits.
It’s flexible enough for both short-term goals and mid-term investment plans.
Fee Structure
| Fee Type | Rate / Detail | Description |
| Management Fee | 2% per annum | Covers fund management, admin, and advisory costs |
| VAT on Fees | 16% | Applied within the management expense ratio |
| Entry / Exit Fees | None | No upfront or redemption charges |
| Quoted Yields | Net of fees, gross of tax | Transparent performance reporting |
| Withholding Tax | 15% | Deducted at source on interest income |
This fee model is straightforward — the yield you see already accounts for expenses.
For individual investors, only withholding tax is deducted at the point of income distribution or redemption.
Portfolio Allocation and Risk Profile
The composition of the fund reveals its risk behaviour and return potential.
Understanding where your money actually goes helps you appreciate how the fund balances safety and yield.
Portfolio Allocation
| Asset Class | Proportion (%) | Purpose |
| Treasury Bonds | 54% | Stable, long-term income generation |
| Fixed Deposits | 41% | Short-term liquidity and interest accrual |
| Cash & Demand Deposits | 4% | To manage withdrawals and market timing |
| Corporate Bonds & Others | 1% | Diversification and incremental return |
The portfolio is primarily composed of government-backed instruments, which ensures high credit quality and minimal default risk. The fixed deposits provide stability and liquidity, while the small corporate exposure helps enhance returns modestly.
Risk Analysis
| Risk Type | Level | Explanation |
| Credit Risk | Low | Government and top-tier bank exposure |
| Interest Rate Risk | Moderate | Longer-term bonds may fluctuate as rates change |
| Liquidity Risk | Low | Short duration ensures easy redemptions |
| Currency Risk | None | Entirely Kenya-shilling based |
The fund prioritises capital safety, but it’s not immune to market changes. Bond prices can temporarily fall when interest rates rise, though these effects are usually offset by ongoing coupon income.
Market Position and Competitive Performance
The NCBA Fixed Income Fund isn’t just large — it’s a market leader by a wide margin.
It has become a benchmark in the fixed-income category due to its consistent results and prudent management.
Market Share of Fixed Income Funds (as of June 2025)
| Fund | AUM (KES Billion) | Market Share (%) |
| NCBA Fixed Income Fund (KES) | 34.18 | 32.4% |
| Sanlam Fixed Income USD Fund | 20.81 | 19.7% |
| Britam Bond Plus Fund | 19.59 | 18.6% |
| NCBA Dollar Fixed Income Fund | 6.60 | 6.2% |
| Zimele Fixed Income Fund | 3.41 | 3.2% |
| Others Combined | 21.04 | 19.0% |
| Total Fixed Income Funds | 105.63 | 100% |
NCBA commands nearly a third of the entire market, reinforcing its strength and investor confidence. Its size gives it access to better deal flow, lower transaction costs, and premium allocation in government issues — advantages smaller fund managers rarely enjoy.
Performance vs. Alternatives
Compared to Money Market Funds (MMFs), which typically yield 10–11% annually, the Fixed Income Fund adopts a slightly longer investment horizon and earns returns from coupon-bearing securities.
Its goal isn’t to chase short-term highs but to deliver consistent, inflation-beating returns over time. For investors seeking a balance between liquidity, safety, and yield, the NCBA Fixed Income Fund provides a reliable solution.
Who Should Invest in the NCBA Fixed Income Fund?
Not all investors have the same financial goals, timelines, or risk appetite.
Here’s who this fund suits best — and when it may not be the right fit.
Ideal Investors
- Professionals who want to earn passive income while keeping funds accessible.
- Small business owners who need a flexible yet rewarding place to park surplus cash.
- Parents or families building education or emergency funds.
- Corporates and SACCOs managing operational reserves or short-term float.
- Retirees seeking a predictable income without high exposure to market volatility.
This fund fits perfectly as the “income” or “safety” pillar in a diversified personal or institutional portfolio.
Who Should Avoid It
The NCBA Fixed Income Fund may not be ideal for:
- Investors expecting high-risk, high-reward growth.
- Traders looking for speculative gains or foreign currency exposure.
- Those who require instant liquidity (same-day access).
It’s designed for stability and gradual growth, not aggressive accumulation.
How to Open and Manage Your Account
Joining the fund is seamless and can be done digitally or through NCBA’s nationwide network.
Step-by-Step Process
- Fill in the application form via NCBA’s Wealth Management portal or branch.
- Submit your KYC documents (National ID, KRA PIN, proof of address).
- Receive a unique portfolio code tied to your investment account.
- Deposit at least KES 1,000 via Paybill, bank transfer, or standing order.
- Your funds are allocated at the day’s unit price, and you start earning immediately.
You can monitor your portfolio through periodic statements or NCBA’s online dashboards, which display unit prices, accrued income, and total value.
Withdrawals
Withdrawals are processed within two working days (T+2). You simply submit a redemption form — either online or through your relationship manager — specifying the amount or units to be withdrawn.
Funds are credited directly to your nominated bank account without any charges.
Frequently Asked Questions (FAQs)
1. Is the NCBA Fixed Income Fund the same as a Money Market Fund?
Not quite. The NCBA Fixed Income Fund invests in slightly longer-term instruments, giving it access to higher yields. It’s a more advanced version of a Money Market Fund — still low-risk but with exposure to medium-term government and corporate bonds.
2. What’s the minimum amount I can invest?
You can start with just KES 1,000 and add top-ups of the same amount at any time. This accessibility makes it suitable for both retail and institutional investors.
3. How are the returns paid out?
Returns are reinvested daily into your account, reflected in your unit price. You can withdraw any time to realise your earnings, or let them compound for stronger long-term growth.
4. What are the management fees?
The fund charges a 2% annual management fee, already included in the quoted yields. There are no entry or exit fees, ensuring complete transparency.
5. Is my investment safe?
Yes. Assets are held by KCB Bank (Trustee) and Absa Bank (Custodian) under the oversight of the CMA. While the fund isn’t capital-guaranteed, it’s one of the most secure investment options available in Kenya today.
6. Can I lose money?
Losses are unlikely but possible in rare cases, such as when interest rates spike or bond prices temporarily fall. However, since most securities are held to maturity, such effects are short-term and minimal.
7. How does this fund compare to others in Kenya?
With KES 34 billion in AUM and a 32.4% market share, the NCBA Fixed Income Fund is the largest and most stable fixed-income fund in the country. It’s backed by a strong institution, audited by Deloitte & Touche, and trusted by thousands of investors nationwide.
8. Can I access it if I live abroad or bank elsewhere?
Yes. The fund accepts both local and diaspora investors who can invest via NCBA online channels or bank transfers. All returns are credited in Kenyan shillings.
9. What’s the best strategy when investing here?
For maximum benefit, hold your investment for at least 6–12 months to ride through short-term rate fluctuations and enjoy compounding. You can also use it as a safe holding account before moving into higher-yield assets.
Conclusion: Is the NCBA Fixed Income Fund Worth It in 2025?
The NCBA Fixed Income Fund continues to outperform expectations by offering solid returns, liquidity, and peace of mind in an unpredictable economy. It combines the discipline of professional management with the accessibility that modern investors need.
If your financial goal is to protect capital, earn a stable income, and avoid volatility, this fund remains one of the best low-risk vehicles in Kenya’s investment landscape today.
For medium-term planners, professionals, or retirees, it’s a practical, tested, and trusted solution to grow your money the smart way.
