Holding your money in dollars is a strong wealth-preservation strategy. But idle cash in a dollar account earns almost nothing.
That’s where the Sanlam Fixed Income USD Fund comes in — a fund built to help you preserve capital and earn steady income in USD, without taking high risks.
Let’s break down how the fund works, its current yields, performance, and what makes it stand out in Kenya’s dollar investment space.
Understanding the Sanlam Fixed Income USD Fund
Before you invest, it’s essential to know what this fund is designed to achieve and how it fits into your wider portfolio.
The Sanlam Fixed Income USD Fund is a USD-denominated unit trust that pools money from investors and invests it in high-quality dollar-denominated instruments, including government Eurobonds, corporate bonds, and money market deposits.
Its primary goal is to preserve your capital while providing a predictable stream of USD income. It’s ideal for investors seeking a low-to-moderate risk option for their dollar holdings.
Fund Snapshot (as of Q2 2025)
| Feature | Details |
| Fund Name | Sanlam Fixed Income USD Fund |
| Fund Manager | Sanlam Investments East Africa Ltd |
| Fund Type | USD-denominated Fixed Income Fund |
| Effective Annual Yield | 5.35% (as of Nov 2025) |
| One-Year Return | 5.78% (2024) |
| AUM (Q2 2025)** | Ksh 20.8 billion (≈ USD 210 million) |
| Risk Profile | Moderate |
| Minimum Initial Investment | USD 2,500 |
| Minimum Top-Up | USD 500 |
| Withdrawal Timeline | Within three working days |
| Income Distribution | Monthly, in USD |
| Management Fee | 1.5% per annum |
| Total Expense Ratio | 2.0% |
This fund has grown rapidly, becoming one of the largest USD-denominated funds in Kenya, accounting for nearly 20% of total fixed income fund assets according to the CMA’s Q2 2025 report.
How the Sanlam Fixed Income USD Fund Works
The Sanlam Fixed Income USD Fund operates like a bridge between safety and opportunity.
It takes your dollars and invests them in short- to medium-term USD fixed-income securities that balance return and liquidity.
The fund manager prioritizes capital preservation by choosing instruments with strong credit ratings and stable issuers.
Portfolio Composition
| Asset Class | Approximate Allocation | Purpose |
| Kenya Government Eurobonds | 49% | Main income driver with sovereign backing |
| Cash and Bank Deposits | 45% | Ensures liquidity and stability |
| Corporate Debt | 4% | Adds incremental yield |
| Mutual Fund Exposure | 2% | Diversifies risk across instruments |
This mix ensures that your dollars are always working — earning income while remaining accessible when needed.
Minimum Investment, Top-Ups, and Withdrawals
Getting started with the fund is straightforward. You can open an account with a minimum deposit of USD 2,500 and add funds from as little as USD 500 at any time.
Withdrawals are flexible — the fund allows one free withdrawal per month and processes redemption requests within three business days. Any additional withdrawals within the same month attract a USD 5 charge.
For investors seeking both yield and flexibility, this structure makes the fund highly convenient.
Performance Overview (2024–2025)
Every investor wants to know how the fund has performed — and in this case, the record is strong.
The Sanlam Fixed Income USD Fund has consistently delivered competitive USD returns despite global interest rate volatility.
| Period | Performance | Remarks |
| 2024 Calendar Year | 5.78% | Delivered above global dollar deposit rates |
| 12 Months to Sep 2025 | 7.5% | Strong rebound driven by bond revaluation gains |
| Current Effective Annual Yield (Nov 2025) | 5.35% | Net of fees but before withholding tax |
| Average Monthly Return | 0.5–0.6% | Reflects consistent income flow |
This consistent performance demonstrates that the fund is actively managed and responsive to market movements — a crucial advantage in USD-denominated assets.
Growth and Market Position
The Sanlam Fixed Income USD Fund has seen tremendous growth over the past year.
As of Q2 2025, the fund’s assets under management (AUM) stood at Ksh 20.8 billion, equivalent to about USD 210 million. This growth reflects strong investor confidence and robust performance.
In 2024, it was already Kenya’s largest USD fund with Ksh 12.1 billion, showing nearly 70% growth in under a year.
That growth means more institutional participation, tighter pricing on assets, and improved liquidity — all of which are beneficial to investors.
Fees and Costs
The fund charges a management fee of 1.5% per annum, which covers the costs of active portfolio management and operations.
Its total expense ratio stands at 2.0%, inclusive of all administrative costs. These fees are already factored into the published effective annual yield.
You’ll also need to factor in withholding tax on income distributions as per Kenyan tax law.
Beyond that, there are no entry or exit fees — only the USD 5 charge for multiple withdrawals within a month.
Overall, the pricing is fair, given the active management and consistent performance.
Who Should Invest in the Sanlam Fixed Income USD Fund
This fund is ideal for investors seeking stability and a consistent income in dollars.
It’s ideal if you:
- Earn income or retain reserves in USD.
- Want to hedge against the Kenya shilling depreciation.
- Prefer professional management rather than buying Eurobonds directly.
- Need a regular income or a medium-term holding account for USD cash.
For businesses and individuals with dollar-denominated obligations — such as importers, consultants paid in USD, or parents planning their children’s foreign education — this fund can play a strategic role in wealth preservation.
However, if all your income and expenses are in Kenyan shillings, consider building your KES foundation first before diversifying into USD assets.
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Risks and Key Considerations
No investment is risk-free, even those branded “conservative.”
Here are the main risks you should understand:
1. Interest Rate Risk
Bond values fall when interest rates rise. However, Sanlam actively adjusts durations to limit this effect.
2. Credit and Sovereign Risk
A significant portion of the fund is invested in Kenya Eurobonds. Any negative changes in the country’s credit rating may affect returns.
3. Liquidity Risk
Although the fund maintains a large cash buffer, extreme market conditions could delay withdrawals.
4. Currency Risk
While you invest in USD, any subsequent conversion to KES will depend on the prevailing foreign exchange rates.
Despite these, the fund remains a moderate-risk option, managed by a team with deep fixed-income expertise and backed by the Sanlam group’s strong governance framework.
Also Read: Sanlam Money Market Fund Review
FAQs About the Sanlam Fixed Income USD Fund
1. What is the current yield on the Sanlam Fixed Income USD Fund?
As of November 2025, the fund offers an effective annual yield of 5.35%. This yield changes slightly depending on market conditions.
2. How long does it take to withdraw funds?
Withdrawals are processed within three business days. You get one free withdrawal per month.
3. What is the minimum investment required?
The minimum initial investment is USD 2,500, with top-ups allowed from USD 500.
4. Is my capital guaranteed?
No. While the fund focuses on preserving capital, returns may fluctuate in response to movements in the bond market.
5. How often do I earn income?
Income is distributed monthly in USD, and you can choose to reinvest it for compounding.
Final Thoughts
The Sanlam Fixed Income USD Fund has established itself as one of Kenya’s most trusted dollar funds. It offers a rare blend of stability, accessibility, and solid returns in foreign currency — a combination that many investors now consider essential in a diversified portfolio.
If your financial plan involves earning, saving, or spending in dollars, this fund can help you grow your capital safely while keeping liquidity intact.
It’s a disciplined, low-maintenance way to make your dollars work harder — month after month.
