Are Special Funds Worth It? The Truth About Kenya’s Special Funds

You’ve probably heard of Money Market Funds, Equity Funds, Balanced Funds… but what about Special Funds? Mansa X? Oak Fund? These are not your everyday savings vehicles. Some claim to offer returns as high as 29% per year.

Tempting, right? But before you move your money, it’s worth asking: are they really worth it?

In this article, I’ll break down what these funds actually are, how they work, who they’re best suited for, and whether you should consider investing in one.

By the end of this article, you’ll understand:

What makes special funds different from traditional unit trusts
The risks, returns, and investor profile that fits best
Whether these funds deserve a place in your portfolio

What Are Special Funds?

Special Funds are privately managed investment vehicles, often structured similarly to hedge funds. They are regulated by Kenya’s Capital Markets Authority (CMA) and usually invest across multiple asset classes such as:

Foreign Exchange (Forex): Trading currency pairs like USD/KES, EUR/USD using discretionary or algorithmic strategies.
Commodities: Gold, oil, agricultural products, often via CFDs.
Equities: Local (NSE) and international stocks, using long/short strategies.
Fixed Income: Bonds and T-bills for stability.
Derivatives: Options and futures to hedge or speculate.
Private Equity / Structured Products: Occasionally used for higher-yield, illiquid positions.

These funds are not passive. They’re actively managed, carry more risk, and often require significant capital to join.

Case Examples:

Mansa X: Focuses on forex, commodities, and global indices. Uses hedging and tactical positioning.
Oak Fund: Known for aggressive forex exposure and international trading strategies.

Why Are They Popular in 2025?

One word: returns.

While most Money Market Funds (MMFs) offer 9–11% annually, some special funds like Mansa X and Oak Fund have posted annual returns of 17% to even 29% in recent years.

With inflation biting and traditional assets underperforming, investors are chasing higher-yield alternatives that are more sophisticated than crypto but still high-growth.

Fund Breakdown

Common Features of Kenya’s Special Funds:

Regulated by CMA – Unlike pyramid schemes, these funds operate under CMA oversight.
Pooled Investments – Your money joins others in a shared fund.
High Minimums – Entry typically starts at Ksh 250,000 or more.
Lock-In Periods – Usually 6–12 months with penalties for early exits.
Actively Managed – Experienced professionals make frequent market decisions.
Higher Risk/Return – Aim for 15–30% returns, but losses are possible.
Performance Fees – Managers earn a cut of profits (e.g., 2% + 20%).
Limited Liquidity – You can’t withdraw anytime like in MMFs.
Diversified Strategies – Multi-asset, multi-strategy for better risk-adjusted returns.
Frequent Reporting – Monthly or quarterly updates are common.

Comparison Table: Special Funds vs Unit Trusts in Kenya

Feature	Special Funds	Money Market Funds	Equity Funds	Fixed Income	Balanced Funds
Regulator	CMA	CMA	CMA	CMA	CMA
Risk Level	High	Low	High	Moderate	Moderate-High
Target Returns	15–30% (not guaranteed)	8–12%	12–20%+	9–13%	10–15%+
Minimum Investment	Ksh 250K+	Ksh 100+	Ksh 1K+	Ksh 1K+	Ksh 1K+
Liquidity	Low	Very High	Medium	Medium	Medium
Investor Type	Wealthy, risk-tolerant	Beginners, conservative	Long-term, high-risk	Income-focused	Balanced-risk investors
Capital Guarantee	No	Yes	No	No	No
Fee Structure	Management + performance	Management	Management	Management	Management
Access	Limited	Apps, USSD, M-Pesa	Medium	Medium	Medium
Examples	Mansa X, Oak Fund	CIC MMF, NCBA	Old Mutual, Sanlam	CIC Bond, Cytonn	ICEA, Britam

Who Are These Funds For?

Special Funds are not for everyone.
They may be suitable for:

Investors with net worth above Ksh 1M
Those looking for diversification beyond MMFs or SACCOs
People who can handle 6–12 months without touching their money
Investors comfortable with seeing monthly fluctuations

They are not suitable for:

Emergency savings
First-time investors or students
Anyone who might need the money within 3–6 months

Risk Suitability Quiz:

Can you invest over Ksh 250,000 without needing it in 6–12 months?
Are you okay with potentially losing money in a bad quarter?
Do you already have an emergency fund and stable MMF portfolio?

Are They Worth It?

If you’re:

Already diversified
Understand market risk
Can lock up capital
Trust the fund managers

Then yes — they can be worth it.

But if you’re still:

Building your savings foundation
Looking for stability or liquidity
New to investing

Stick to MMFs, SACCOs, or beginner-friendly ETFs.

Money stacked in piles to show how money grows in a special fund

Red Flags To Watch For

Before you invest in any special fund:

Ask for the Information Memorandum (IM)
Confirm the fund is CMA-licensed
Understand the fees, lock-in period, and exit terms
Avoid unlicensed entities promising 40%+ monthly returns (that’s a huge red flag- it’s a scam )

Must-Have Documents to Request:

Document	Purpose	Who Provides It	Public?
Information Memorandum	Details investment strategy, risks, fees	Fund Manager	Private (on request)
Fund Fact Sheet	Monthly/quarterly snapshot	Fund Manager	Public
Trust Deed	Legal rights of investor	Fund Trustee	Private (on request)
IPS	Management guidelines	Fund Manager	Summary only
CMA License Certificate	Proof of regulation	CMA / Fund	Public

Conclusion: Make the Right Move

Special Funds in Kenya are an exciting, high-risk, high-reward opportunity. They are not for your emergency savings or short-term goals. But if you have the capital, risk tolerance, and a diversified portfolio, they could be a powerful addition.

Don’t just follow the hype — follow the facts.

Want to Learn More?
Watch my full video breakdown: YouTube: Are Special Funds Worth It?

And if you’re building your investment journey, start with my beginner series on MMFs and bonds.