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Madison Insurance has announced plans to close its equity fund and balanced fund in order to focus on money market funds. Equity funds are investments targetting the stock market while balanced funds include both stocks and bonds.

Money market funds are mainly government securities and other liquid assets like deposits and corporate bonds.

“We wish to notify the public that we have completed winding up the Madison Equity fund and Madison balanced fund having received approval from the Corporate trustee and the Capital Markets Authority,’’ Madison said. However, it said in a statement that customers can continue investing in the firm’s money market fund which is offering investment returns of 9.3 percent per annum as of February 2022.

Market analysts say that it has become tough to make good returns in the equities market in the last couple of years with the Nairobi Securities Exchange (NSE) taking a beating from the pandemic and pre-pandemic economic problems.

 Asset classes

According to Johnson Nderi corporate finance manager at ABC Capital, the firm is trying to ensure they remain with their best performing asset classes and remove the not so good ones. “I think they are okay… just a few products that didn’t work,” he said.

“Equity funds seem to be hard to crack for most fund managers,” said an analyst who did not want to be quoted. Equity investment needs close monitoring and ability to exit positions quickly and while entering the market at the right time which comes with a lot of risks.

Other investment schemes that are having a hard time include Amana Capital, Cytonn Investments and others. The stock market has been trailing other asset classes since 2018 due to tight market liquidity that came from pending bills on government projects and high interest rates that were being offered on government securities.