Faulo Microfinance Bank has launched the Money Market Fund (MMF), with the aim of expanding investment options for its clients.
A money market fund (MMF) is a type of mutual fund that invests in high-quality, short-term debt instruments, cash, and cash equivalents.
Although not quite as safe as cash, money market funds are considered exceptionally low risk on the investment spectrum and therefore carry a near risk-free rate of return.
Money market funds invest primarily in government and corporate debt securities that tend to outperform inflation, giving investors a better chance of preserving the real value of investments than traditional savings options.
The mutual wealth management fund is part of Faulo Bank’s strategic plan to develop its wealth management portfolio, leveraging the extensive experience and resources of Old Mutual Investment Group (OMIG), the investment arm of its parent company, Old Mutual Group, Faulo said.
“We are pleased to introduce our financial investment fund, which is part of the innovative financial solutions we create for our clients. This launch contributes to expanding our clients’ access to high-quality investment opportunities,” said the bank’s CEO, Julius Ouma, in a statement on Tuesday.
“We work with a team of highly experienced investment managers who will ensure that our clients get the best returns on their investments,” he added.
The Faulu MMF Fund has achieved an annual return of 16.32 percent as of July 18, 2024, with investors allowed to create portfolios with a minimum of Sh1,000.
The Faulu MMF was launched a month after the bank received a significant capital injection of Sh900 million from Old Mutual Group.
The capital injection has strengthened its financial position, enabling it to increase its lending capacity and expand its range of products and services, Faulo said.
“Old Mutual has decades of experience in managing mutual funds and we bring this expertise to ensure that Fowler’s clients receive competitive returns on their investments,” said Anthony Mwethiga, Managing Director of Old Mutual Investment Group.
“Our fund management teams will be fully available to provide guidance across a diverse portfolio of money market instruments,” he added.