A Kenyan investor has come out to lament how their investment has failed to bear the kind of profits they expected. This Kenyan says that they invested Sh505,000 in a Money Market Fund. However, the monthly passive income they are receiving from this investment is just Sh2,800.
This confession has seen other Kenyans who have invested in Money Market Funds come out with similar lamentations concerning the returns they are getting from their investments.
“You are doing much better than I am. I have invested Sh3 million in a USD Money Market Fund and I am only getting Sh10,000 in returns per month. I am going to withdraw my money from this fund,” a Kenyan who identified as Kelvin responded.
Another investor went on to share that she invested Sh200,000 in a Money Market Fund and received Sh1,400 returns per month while another investor’s capital of Sh450,000 produced returns of just Sh3,047 per month.
According to Rhina Namsia, the founder of The Acemt Consulting, a training and consultation company that provides financial planning and investment advisory, you might be very disappointed if you invest in the Money Market Fund without fully understanding how it works, what it’s purpose is for, and whether you are a good fit for it.
“Money Market Funds are good for building emergency funds, black tax fund, and protecting your money against inflation. They are also good if you have some money that you are yet to decide on what to invest in,” she says.
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Namsia cautions that when you invest in MMFs, you should not look for crazy-high type of returns. “Most people are investing in MMFs because of their low risk nature but do not understand that they are not structured to offer crazy returns,” she says.
“But don’t get it twisted. Huge sums of money when put in a money market can result in good returns even in a short run. It’s the little money that earn few coins when one is expecting huge returns that make people get discouraged.”
