Africa Digest News

In 2025, money market funds (MMFs) will continue to be a favourite for Kenyan investors looking for low-risk, liquid ways to hold their money.

With inflation remaining around 5-6% and short-term interest rates stabilising post-2024 hikes, MMFs offer competitive yields while preserving capital.

But when it comes to costs, every percentage point matters, especially for conservative savers prioritising net returns.

In this fact-checked analysis, we’ll compare two heavyweights: Sanlam Money Market Fund and ICEA Lion Money Market Fund.

Both are regulated by the Capital Markets Authority (CMA) and boast massive asset bases, with Sanlam at KES 92.74 billion and ICEA Lion at around KES 20-25 billion as of mid-2025.

We’ll narrow in on fees, drawing from official fact sheets and recent reports, to determine the low-fee champion for the rest of 2025.

Quick Overview: Why Fees Matter in MMFs

MMFs invest in short-term instruments like Treasury bills, fixed deposits, and commercial paper, delivering daily accrued interest. Fees erode your effective yield:

• Management Fee: The core cost (typically 1.5-2.5% annually) for fund oversight.
• Expense Ratio: Total costs, including admin and trustee fees.
• Other Charges: Entry/exit fees, withdrawal penalties.

In 2025, average gross yields are estimated at 14-16%, but after fees and 15% withholding tax, net returns drop to 9-11%. Lower fees mean more in your pocket.

Data sourced from official fact sheets and performance reports.

Fee Breakdown: Head-to-Head

Sanlam Money Market Fund Fees

Sanlam, managed by Sanlam Investments East Africa, charges a straightforward but slightly elevated structure:

• Annual Management Fee: 2.0% of assets under management.
• Expense Ratio: 2.1% (includes trustee and other operational costs).
• Other Fees: No entry fees, but subsequent withdrawals in the same month incur KES 500 per transaction. No minimum top-up.

This setup was confirmed in Sanlam’s June 2025 fact sheet, reflecting a post-2024 adjustment by custodian Standard Chartered Bank.

While the 2.0% management fee is standard, the extra 0.1% in expenses and withdrawal penalties can add up for active users.

READ ALSO:What Savvy Investors Should Know About the Latest MMF Interest Rate Trends

ICEA Lion Money Market Fund Fees

ICEA Lion, under ICEA Lion Asset Management with KCB as trustee, keeps it lean and investor-friendly:

• Annual Management Fee: 2.0% of assets.
• Expense Ratio: ~2.0% (aligned with management fee; no notable extras reported).
• Other Fees: Zero entry, exit, or withdrawal fees. Minimum top-up is flexible (any amount).

Recent analyses peg ICEA’s fees at a flat 2%, with no hidden charges, ideal for frequent liquidity needs. This is echoed in 2025 performance trackers and aligns with their DigiTrust platform’s no-fee withdrawal policy.

Winner on Core Fees: It’s a tie at 2.0% management fees. However, Sanlam’s 2.1% expense ratio edges it higher overall.

Beyond Management Fees: Hidden Costs and Accessibility

• Withdrawal Flexibility: ICEA Lion shines here; no penalties mean you can access funds without the KES 500 sting that Sanlam imposes for intra-month draws. For emergency funds, this alone tips the scale.
• Entry Barriers: ICEA’s KES 500 minimum democratises access for beginners, versus Sanlam’s KES 2,500 hurdle.
• Tax and Yield Impact: Both face 15% withholding tax on interest. Sanlam’s higher gross yield (15.6%) delivers a stronger net (10.32%), but ICEA’s lower effective costs could close the gap for smaller portfolios.

In real terms, on a KES 100,000 investment:

• Sanlam: ~KES 10,320 net interest (pre-tax), minus potential withdrawal fees.
• ICEA Lion: ~KES 9,800 net, but no extras, thus better for cost-conscious users.

Other Factors to Consider in 2025

• Performance Stability: Sanlam leads in assets and yields, topping H1 2025 rankings. ICEA Lion holds steady at 9-10%, backed by a century-old legacy.
• Digital Experience: Both offer apps for seamless deposits/withdrawals. ICEA’s WhatsApp integration (up to KES 10,000 requests) adds convenience.
• Risk Profile: Ultra-low for both (AAA-rated holdings), but monitor CMA updates amid global rate shifts.

Verdict: ICEA Lion Wins for Low Fees in 2025

If your goal is minimising fees, ICEA Lion MMF edges out as the 2025 victor. Its flat 2% structure, zero withdrawal charges, and rock-bottom entry point make it the more economical choice for everyday savers, saving you up to KES 500+ annually on liquidity alone.

Sanlam’s marginally higher expenses and penalties make it pricier for active users, despite superior yields.

That said, if scale and returns beat pure cost savings, Sanlam remains a powerhouse. Diversify across both for balance, and always consult a financial advisor.

As rates evolve through Q4 2025, revisit yields monthly via CMA or fund portals.

Investing involves risks; past performance isn’t indicative of future results. This is not financial advice.

Ronnie Paul is a seasoned writer and analyst with a prolific portfolio of over 1,000 published articles, specialising in fintech, cryptocurrency, climate change, and digital finance at Africa Digest News.