Locally-owned firm Avocarp Asset Management has entered the market targeting the unit trust sector, which is attracting more players.
The firm’s Collective Investment Scheme (CIS) has been licensed by the Capital Markets Authority and will start operations this week.
The CIS will offer 10 separate funds, including a money market fund, a Eurofix Fixed Income Fund, and two that are Sharia-compliant.
The value of unit trust assets under management in Kenya has steadily grown over the years to hit Sh225.4 billion as of the end of March, highlighting the vast potential that is attracting new firms into the sector.
“We have been approved by the CMA and we are going live to the public on June 3,” said Avocarp chief executive Monicah Mwaniki.
The minimum amount for the firm’s fixed income fund is Sh100,000, while the lowest for the money market is Sh3,000 with a minimum top-up of Sh1,000.
Avocarp’s entry brings to 37 the number of licensed CISs, which are keen for a share of the billions of shillings. The fixed-income funds for Avocarp will have a lock-in period of six months. Investors can trade using the Kenya shilling, the dollar, and the South African rand.
The firm is angling for a share of the market dominated by three firms with a combined share of 54.7 percent, or an equivalent of Sh123.23 billion end of March. The CIC Unit Trust Fund is the market leader with a share of 27.5 percent, followed by the NCBA Unit Trust Funds at 13.9 percent and British American Unit Trust Scheme (13.3 percent).
The number of investors holding wealth in the CISs has also significantly grown over the years to 1.1 million at March this year, compared to 171,904 three years ago.
Money market funds account for the biggest share of assets under management at Sh148.61 billion or 65.9 percent, according to official data from CMA.
Fixed income fund comes second with a share of 20.3 percent or an equivalent of Sh45.83 billion while Equity fund is third at Sh2.67 billion (1.2 percent).
The value of assets under management stood at Sh56.6 billion six years ago meaning that it has jumped by 298.2 percent through the period to March this year.
