If you have outgrown your savings account but a money market fund feels a little too tame, a fixed income fund is often the next step up. The best fixed income funds in Kenya are simply the ones paying the highest net return for the level of risk you are comfortable with. As of the latest published data (May 2026), the Mayfair Fixed Income Fund leads the pack with a net return of about 14.14% a year, well ahead of the rest of the field.
Behind Mayfair, the Nabo Fixed Income Fund nets roughly 10.20%, Zimele 9.53%, and Kuza 9.21%. As a group, fixed income funds averaged 11.52% gross and 9.79% net in May 2026, which is about two percentage points more than the typical money market fund pays right now. This guide ranks the funds, explains the trade-offs in plain English, and shows you exactly what your money would earn.
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Key takeaways
- A fixed income fund invests mainly in longer-dated government bonds and higher-yielding corporate debt, so it usually pays more than a money market fund but its value moves around a little more.
- As of May 2026, the category averaged 11.52% gross (9.79% net), roughly two percentage points above the money market fund average of 8.99% gross.
- Mayfair leads at 14.14% net, an outlier driven by active management of longer-dated bonds during a year of falling interest rates.
- Minimums are low. Kuza starts at KSh 1,000 and Madison at KSh 5,000, so you do not need a fortune to begin.
- The catch: your capital can dip in the short term, and some funds ask you to leave your money in for a set notice period.
Best fixed income funds in Kenya 2026: the leaderboard
The table below ranks the best fixed income funds in Kenya tracked in the most recent market wrap-up, ordered by net return (the figure you actually keep after the 15% withholding tax and fees). These are annualised returns based on daily performance disclosures, measured as of May 2026. Returns move constantly, so treat this as a starting point and confirm the current figure on each fund fact sheet before you invest.
| Rank | Fund | Gross return (% p.a.) | Net return (% p.a.) |
|---|---|---|---|
| 1 | Mayfair Fixed Income Fund | 16.64 | 14.14 |
| 2 | Nabo Fixed Income Fund | 12.00 | 10.20 |
| 3 | Zimele Fixed Income Fund | 11.22 | 9.53 |
| 4 | Kuza Fixed Income Fund | 10.83 | 9.21 |
| 5 | Gulfcap Fixed Income Fund | 10.08 | 8.57 |
| 6 | Madison Fixed Income Fund | 10.06 | 8.55 |
| 7 | Britam Bond Plus Fund | 9.81 | 8.34 |
| Category average | 11.52 | 9.79 |
Among the best fixed income funds in Kenya, Mayfair is the standout, and it deserves a word of caution as much as praise. A 16.64% gross return is exceptional for this category and reflects aggressive positioning in longer-dated bonds while rates were still falling. That same strategy can work against a fund if rates suddenly rise, so a headline number this far above the pack is a reason to read the fact sheet carefully, not a guarantee it will repeat.
The more grounded story is the cluster of funds netting between 8.5% and 10.2%: Nabo, Zimele, Kuza, Gulfcap and Madison. These are the best fixed income funds in Kenya that most people will actually use. They pay a clear premium over a money market fund without taking on equity-style risk, and several of them are run by managers with long track records in Kenyan debt markets.
What is a fixed income fund, in plain English?
A fixed income fund, the building block behind the best fixed income funds in Kenya, is a unit trust that pools money from many investors and lends it out, mostly by buying bonds. When you buy a government Treasury bond, you are lending money to the government in exchange for regular interest. A fixed income fund does this for you, across dozens of bonds and other debt, so you get a slice of that interest without having to buy and manage bonds yourself.
The word “fixed” refers to the interest, not your capital. The bonds pay a fixed rate, but the market value of those bonds still moves up and down day to day, mainly with interest rates. When rates fall, existing bonds become more valuable and the fund gains. When rates rise, older bonds are worth less and the fund can dip. That is the key difference from a money market fund, which holds only very short-term instruments and barely moves in value.
Think of it as the middle rung on a ladder. A money market fund is the low, stable rung. A fixed income fund is one step up: more return, a bit more movement. Above that sit special funds and equity funds, which can swing much harder. If you want the calmer rung, our guide to the best money market funds in Kenya covers it in full.
Fixed income fund vs money market fund: which pays more?
This is the question most readers comparing the best fixed income funds in Kenya really came for. Right now the answer is clear: fixed income funds pay more. In May 2026 the fixed income category averaged 11.52% gross against 8.99% for money market funds, a gap of roughly 2.5 percentage points before tax. On a net basis that is about 9.79% versus 7.64%.
But with the best fixed income funds in Kenya, higher return never comes free. The extra yield is compensation for two things. First, duration risk: fixed income funds hold longer-dated bonds, so their value swings more when interest rates change. Second, a slightly longer time horizon: you should be comfortable leaving your money invested for at least one to three years, so a short-term wobble does not force you to sell at a bad moment.
Against even the best fixed income funds in Kenya, a money market fund still wins on two counts: it almost never falls in value, and you can withdraw within a day or two. So the honest rule of thumb is this. Money you might need next month belongs in a money market fund. Money you can leave for a few years, and want to earn a bit more on, is a good fit for a fixed income fund. Many people simply hold both.
If you are willing to go one rung higher again for the chance of larger returns, look at our roundup of the best special funds in Kenya and the detailed Mansa X Special Fund review. Just remember those carry real capital risk that a fixed income fund does not.
Worked example: what KSh 500,000 would earn
Numbers make the case for the best fixed income funds in Kenya concrete. Say you invest KSh 500,000 and leave it for one year. We will use net returns, because that is what actually lands in your account after the 15% withholding tax.
- In a top money market fund at about 9.7% net, you would earn roughly KSh 48,500 in a year.
- In a mid-table fixed income fund at about 9.2% net (Kuza), you would earn roughly KSh 46,000. Similar, because that fund sits near the MMF leaders.
- In the category-leading fixed income fund at about 14.1% net (Mayfair), you would earn roughly KSh 70,500, around KSh 22,000 more than the money market fund.
That KSh 22,000 gap is the reward for taking on duration risk and a longer horizon. In a year where bonds do well, it looks great. In a year where rates rise sharply, the same fund could return far less, or even dip briefly below what you put in. That is the trade you are making. For very small starting amounts, our note on the minimum you need to start investing shows the same maths on a KSh 10,000 stake.
Minimums, fees and how to invest
Getting started with the best fixed income funds in Kenya is easier and cheaper than most people expect. Minimums vary by manager but many are genuinely small. The Kuza Fixed Income Fund starts at KSh 1,000 with top-ups from as little as KSh 50, and the Madison Fixed Income Fund starts at KSh 5,000. Others, especially those aimed at institutions, set higher entry points, so always check the specific fund fact sheet.
Across the best fixed income funds in Kenya, fees usually come as an annual management fee, typically around 1.5% to 2% of your balance a year, which is already deducted before the net return you see. There is normally no charge to enter or exit, but some funds apply an exit penalty if you withdraw within the first few months, which is their way of discouraging short-term money. Read that clause before you sign.
To invest, you fill in an application form with the fund manager (most now offer this online or by app), send your KYC documents (ID, KRA PIN, a passport photo and sometimes a bank statement), then transfer your money by bank or mobile money. Your money buys units in the fund, and you can usually track the value online. Withdrawals are requested the same way and typically take two to four working days.
The risks you should weigh honestly
No fund is a free lunch, and a good guide tells you the downsides. Here is what to keep in mind with fixed income funds.
Your capital can fall. Unlike a money market fund, the value of a fixed income fund can dip, especially if interest rates rise. Over a long enough horizon this usually smooths out, but if you are forced to sell during a dip, you can get back less than you put in.
Past returns are not a promise. A fund that returned 16% last year did so in specific conditions. When the interest rate cycle turns, the same strategy can underperform. Judge a fund on its consistency and its manager, not just this month’s headline number.
Credit risk. Some funds boost returns by holding corporate bonds and commercial paper, which pay more but can default. A fund leaning heavily on riskier debt earns its higher yield by taking that chance on your behalf.
Liquidity. You cannot always exit instantly. If you might need the cash at short notice, keep that portion in a money market fund instead.
How to choose the right fixed income fund for you
When picking among the best fixed income funds in Kenya, start with your time horizon. If you can leave the money for at least one to three years, a fixed income fund fits. If not, stay in a money market fund. Next, look at net return over time, not just the latest month, and favour funds that are consistently in the top half rather than ones that spike once and fade.
Then check who runs the fund and how big it is. A larger fund from an established manager is generally steadier, though occasionally a smaller nimble fund posts stronger numbers. Read the fact sheet to see what the fund actually holds: mostly government bonds is lower risk, while a heavy tilt to corporate debt is higher risk and higher potential reward. Finally, match the minimum and any exit rules to your own situation.
The best fixed income funds in Kenya for you are the ones that match your horizon and risk appetite, so a simple, sensible approach for most people is to split. Keep your emergency and short-term cash in a top money market fund, and put money you can leave alone for a few years into one or two solid fixed income funds. You capture the extra yield without betting everything on one fund or one strategy.
Why fixed income funds are having a moment in 2026
The timing matters. The Central Bank of Kenya cut its policy rate ten times between August 2024 and early 2026, then paused at 8.75% in April 2026. Falling rates are exactly the conditions in which fixed income funds shine, because the bonds they already hold become more valuable as new bonds are issued at lower rates. That is a big part of why the category outran money market funds so clearly this year.
The flip side for anyone comparing the best fixed income funds in Kenya is worth saying plainly. With inflation ticking up to 6.68% in May 2026, real returns have thinned for everyone, and if the rate cycle turns and rates start rising again, the same duration that helped these funds can hurt them. So the premium the best fixed income funds in Kenya offer over money market funds is real, but it is not permanent. Pick a fund you are happy to hold through a full cycle, not just this month’s leader.
Frequently asked questions
What is the best fixed income fund in Kenya in 2026?
As of May 2026, the Mayfair Fixed Income Fund posted the highest net return at about 14.14% a year, followed by Nabo (10.20%) and Zimele (9.53%). The Kuza Fixed Income Fund netted about 9.21%. Because returns change daily and past performance does not guarantee future results, always confirm the current figure on the fund fact sheet before investing.
Is a fixed income fund better than a money market fund?
Neither is simply better. A fixed income fund usually pays more (about two percentage points more in 2026) but its value can dip and it suits a longer horizon. A money market fund pays a little less but rarely falls and lets you withdraw within a day or two. Many investors hold both: a money market fund for short-term cash and a fixed income fund for money they can leave for a few years.
Can I lose money in a fixed income fund?
Yes, in the short term. If interest rates rise, the bonds a fund holds fall in value, and the fund’s unit price can dip. Over a longer horizon the interest earned usually more than makes up for these swings, but there is no guarantee, and a fund holding riskier corporate debt can also suffer if a borrower defaults.
How much do I need to start a fixed income fund in Kenya?
Often very little. The Kuza Fixed Income Fund starts at KSh 1,000 and the Madison Fixed Income Fund at KSh 5,000. Some funds aimed at larger investors set higher minimums, so check the specific fund fact sheet before you apply.
How are fixed income fund returns taxed in Kenya?
Interest earned in these funds is subject to a 15% withholding tax, which the fund deducts before paying you. The net returns quoted in this article are already after that tax, so the figure you see is close to what you would actually keep.
At the higher-risk end of the ladder sit special funds like the Kuza Momentum Fund, which can return far more but also swing much harder than a fixed income fund.
If part of your goal is hedging against a weaker shilling, compare these with the best dollar funds in Kenya, which pay and hold your money in US dollars.
If a shilling hedge is part of your plan, read our step-by-step guide on how to invest in US dollars from Kenya.
Willing to take more risk for more return? See the best performing special funds in Kenya, which sit a rung higher on the ladder.
Want the safer, more liquid option? Compare the best performing money market funds in Kenya by current net return.
Weighing an education policy against a fund? See what happens if you stop paying your education policy partway through.
Prefer the safer, more liquid option? See our Cytonn Money Market Fund review.
Not sure which category suits you? Read our fixed income fund vs money market fund comparison.
Disclaimer: The content on Sarafu is for educational and informational purposes only. It does not constitute financial, investment, or professional advice. Prices, returns and figures mentioned are approximate and were sourced at the time of writing (May 2026 data), and prices fluctuate constantly and can change within minutes. Past performance is not a promise of future results. All investments carry risk; the value of your investment can go down as well as up, and you may receive back less than you invest. Always do your own research, verify current figures on a live source such as the fund fact sheet or the latest market wrap-up, and consider consulting a licensed financial advisor before making any decision.
