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CIC Money Market


Key Features Fund Performance

Fund Manager: CIC Asset Management Ltd.
Launch Date: Jun-11
Risk Profile: Low
Trustee: Kenya Commercial Bank
Custodian: Co-op Custodial Services
Auditors: Ernst & Young
Minimum Investment: Kshs 5,000.00
Minimum Additional Kshs 1,000.00
Initial Fee: Nil
Annual Management Fee: 2.0%
Effective Annual Yield: 9.51%
Distribution: Monthly
Market Commentary Asset Allocation
GDP: Kenya’s economy slowed to 4.4% in Q32017 compared to 5.6% in
a similar quarter in 2016. The quarter in review was characterized by
moderate increases in food prices despite poor weather conditions and a
prolonged electioneering period which kept growth at its slowest pace in
six years. We expect 2018 GDP to come in at 5.57% on the back of ex-
pected improvement in key sectors such as agriculture, manufacturing and
construction; as well as an improved political climate.

Exchange rates: The Shilling gained against the dollar supported by; horti-
culture exports and steady dollar inflows. There was further support by
positive sentiments from an improved political landscape, the receipt of
Eurobond funds & the extension of the USD 1.5Bn IMF pre-cautionary facil-
ity. According to the CBK, the country’s forex reserves rose to stand at USD
8.8Bn (equivalent to 5.91 months of import cover) following a USD 1.65Bn
drawdown of the Eurobond proceeds. These reserves together with the IMF
facility provide an adequate buffer to the shilling, which will continue to
be supported by diaspora inflows and lower dollar demand.

Inflation: eased further to 4.18% in March 2018 from 4.5% in December Who should invest?
2017. Food inflation, the key component of this inflation basket, abated Investors who are seeking:
2.19% from 3.83% y/y while the non-food, non-fuel indices remained  Capital preservation whilst not seeking long-term capital
mute suggesting that core inflation remained largely contained. Risks may growth.
however stem from higher fuel prices which could inflate transport as well  A high degree of capital stability and who are strictly
as production costs, with ripple effects on most commodities. The rate is
risk averse.
expected to decline further with additional moderation in food pressure as
supply improves following the onset of the long rains.  A short-term parking bay for surplus funds particularly
in times of market volatility.
Interest rates: The MPC unexpectedly lowered the CBR by 50bps to 9.5%.
This was the first easing cycle following the introduction of rate caps. This Key benefits
effectively had mixed reactions to short term rates; with the 91 & 182 day  Liquidity: The client is able to withdraw their funds at
T-bills declining to 8% & 10.38% respectively, while the 364 day bill was short notice with no penalty fees.
up to 11.13%. There was reduced bids uptake by the Treasury which sup-
 Flexibility: The client is able to switch or transfer funds
ported conservative bidding. The MPC may want to assess the impact of
the recent rate cut before making any adjustments to its policy rate; par- to another fund that he/she may have with CICAM.
ticularly with private sector credit growth having decelerated to 2.1% in  Security: The fund invests in government paper and
February 2018. We expect that any further decline in rates will be sup- liquid instruments.
ported by the prevailing high liquidity.  Competitive Returns: Interest is calculated daily and
credited at the end of each month. As an institutional
Outlook: The average return on the fund stood at 9.51% in March 2018. client, the fund benefits from placing deposits in large
Rates on short term treasuries came down despite continued government
sums and as such is able to negotiate for competitive
borrowing which impacted the return on the fund. We expect the low rates
to persist in the medium term thus lowering the return on the fund. rates.
 Professional fund management: prospective investors
benefit from the expertise of our seasoned profession-
Statutory Disclaimer: The value of units may go down as well as up and past performance is not necessarily a guide to the future. There are no guarantees on the client’s capital as the
performance of units in the fund is determined by changes in the value of underlying investments hence value of your unit trust investment.