{"id":15334,"date":"2026-01-24T14:25:18","date_gmt":"2026-01-24T14:25:18","guid":{"rendered":"https:\/\/thndr.horizondm.com\/blogpost\/?p=15334"},"modified":"2026-01-24T14:35:59","modified_gmt":"2026-01-24T14:35:59","slug":"riding-egypts-rate-cycle-money-market-vs-fixed-income-funds","status":"publish","type":"post","link":"https:\/\/thndr.horizondm.com\/blogpost\/riding-egypts-rate-cycle-money-market-vs-fixed-income-funds\/","title":{"rendered":"Riding Egypt\u2019s Rate Cycle: Money-Market vs. Fixed-Income Funds"},"content":{"rendered":"<p><span style=\"font-weight: 400; color: #000000;\">Here is how you can benefit from Egypt\u2019s declining interest rates when choosing between money-market funds and fixed-income funds.<\/span><\/p>\n<p><span style=\"font-weight: 400; color: #000000;\">24 January 2026<\/span><\/p>\n<p><span style=\"font-weight: 400; color: #000000;\">Amr Hussein Elalfy<\/span><\/p>\n<p><span style=\"color: #000000;\"><i><span style=\"font-weight: 400;\">Almost 30 years ago, I had a discount brokerage account in the United States, through which I traded US stocks. One day, I received a communication message from my broker giving me the option to choose between several money-market funds that they offered. Two facts stood out to me at the time:<\/span><\/i><\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"color: #000000;\"><i><span style=\"font-weight: 400;\">The promised net asset value per fund share of these funds was USD1 at the end of every day as interest is usually distributed as more fund shares.<\/span><\/i><\/span><\/li>\n<\/ul>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"color: #000000;\"><i><span style=\"font-weight: 400;\">The fund share may lose value because it is cash-like but not exactly cash because it is always marked to market on a daily basis.<\/span><\/i><\/span><\/li>\n<\/ul>\n<p><span style=\"color: #000000;\"><i><span style=\"font-weight: 400;\">In the United States, money-market funds usually invest in US Treasury bills, government agency securities, commercial paper, and bank certificates of deposit (CDs)\u2014with an average maturity usually under 60 days. However, in Egypt, money-market funds are different, and so are fixed-income funds.<\/span><\/i><\/span><\/p>\n<p><span style=\"color: #000000;\"><i><span style=\"font-weight: 400;\">Here is what you need to know before investing your hard earned money in either money-market or fixed-income funds.<\/span><\/i><\/span><\/p>\n<p>&nbsp;<\/p>\n<h1><span style=\"font-weight: 400; font-size: 24px; color: #000000;\">Fixed income for diversification<\/span><\/h1>\n<p><span style=\"color: #000000;\"><span style=\"font-weight: 400;\">In our <\/span><a style=\"color: #000000;\" href=\"https:\/\/therumble.app\/content\/3DfKnr38Xex5IZqa49HkRV\"><b>Egypt &#8211; 2026 Fundamental Strategy Series<\/b><\/a><span style=\"font-weight: 400;\">, we highlighted that it is important for investors to diversify their portfolios between three main asset classes:<\/span><\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400; color: #000000;\">Equity<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400; color: #000000;\">Fixed income, and<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400; color: #000000;\">Gold.<\/span><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"color: #000000;\"><span style=\"font-weight: 400;\">In doing so, we recommended three strategic asset allocations (SAA) for each asset class depending on each investor\u2019s risk profile, whether conservative, average, or aggressive. The more conservative investors are, the more weight they should have in the fixed income asset class. For the recommended weights for each risk profile, please read our <\/span><a style=\"color: #000000;\" href=\"https:\/\/therumble.app\/content\/3DfKnr38Xex5IZqa49HkRV\"><b>Egypt &#8211; 2026 Fundamental Strategy Series<\/b><\/a><span style=\"font-weight: 400;\">.<\/span><\/span><\/p>\n<p><span style=\"font-weight: 400; color: #000000;\">In Egypt, fixed income instruments can range from banks\u2019 CDs and time deposits to Treasuries, which investors can buy from banks. The only trick here is that it is not as easy to exit without losing some interest. This is where money-market and fixed-income funds come into play.<\/span><\/p>\n<p><span style=\"font-weight: 400; color: #000000;\">But let\u2019s first define what money-market and fixed-income funds are.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h1><span style=\"font-weight: 400; font-size: 24px; color: #000000;\">What are money-market and fixed-income funds?<\/span><\/h1>\n<h2><span style=\"font-weight: 400; font-size: 20px; color: #000000;\">Money-Market Funds<\/span><\/h2>\n<p><span style=\"font-weight: 400; color: #000000;\">These are designed to help investors park their cash while earning a return. They invest in short-term instruments, such as Treasury bills and bank deposits, with maturities of less than one year. These funds offer high liquidity and relatively stable performance, making them suitable for short-term savings and cash management rather than long-term investing.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span style=\"font-weight: 400; font-size: 24px; color: #000000;\">Fixed-Income Funds<\/span><\/h2>\n<p><span style=\"font-weight: 400; color: #000000;\">These invest in longer-term debt instruments, including government bonds, floating-rate notes, corporate bonds, and sukuks. Because these instruments are sensitive to changes in interest rates, the value of fixed-income funds can rise or fall over time. These funds are suitable for investors seeking higher returns (vs. money-market funds) and willing to accept price fluctuations over a medium- to long-term horizon.<\/span><\/p>\n<h1><\/h1>\n<h1><span style=\"font-weight: 400; font-size: 24px; color: #000000;\">Choosing between money-market and fixed-income funds?<\/span><\/h1>\n<p><span style=\"font-weight: 400; color: #000000;\">For investors to choose between money-market and fixed-income funds, it is best to compare them given their different attributes, which we summarize in the below table from an investor\u2019s and a fund\u2019s view:<\/span><\/p>\n<p>&nbsp;<\/p>\n<table>\n<tbody>\n<tr>\n<td><span style=\"color: #000000;\"><b>Attribute<\/b><\/span><\/td>\n<td><span style=\"color: #000000;\"><b>Money-Market Fund<\/b><\/span><\/td>\n<td><span style=\"color: #000000;\"><b>Fixed-Income Fund<\/b><\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"color: #000000;\"><b>An investor\u2019s view<\/b><\/span><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400; color: #000000;\">Investing purpose<\/span><\/td>\n<td><span style=\"font-weight: 400; color: #000000;\">Liquidity parking<\/span><\/td>\n<td><span style=\"font-weight: 400; color: #000000;\">Yield \/ macro positioning<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400; color: #000000;\">Typical holding period<\/span><\/td>\n<td><span style=\"font-weight: 400; color: #000000;\">Days to months<\/span><\/td>\n<td><span style=\"font-weight: 400; color: #000000;\">1 to 5+ years<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400; color: #000000;\">Return<\/span><\/td>\n<td><span style=\"font-weight: 400; color: #000000;\">More stable, more predictable<\/span><\/td>\n<td><span style=\"font-weight: 400; color: #000000;\">Less stable, less predictable<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400; color: #000000;\">NAV volatility<\/span><\/td>\n<td><span style=\"font-weight: 400; color: #000000;\">Very low<\/span><\/td>\n<td><span style=\"font-weight: 400; color: #000000;\">Low to moderate, can be material<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400; color: #000000;\">Income main source<\/span><\/td>\n<td><span style=\"font-weight: 400; color: #000000;\">T-bill yield<\/span><\/td>\n<td><span style=\"font-weight: 400; color: #000000;\">Coupons + capital gains<\/span><\/td>\n<\/tr>\n<tr>\n<td><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td><span style=\"color: #000000;\"><b>A fund\u2019s view<\/b><\/span><\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400; color: #000000;\">Duration (interest rate sensitivity)<\/span><\/td>\n<td><span style=\"font-weight: 400; color: #000000;\">Lower<\/span><\/td>\n<td><span style=\"font-weight: 400; color: #000000;\">Higher<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400; color: #000000;\">Interest rate decisions by CBE<\/span><\/td>\n<td><span style=\"font-weight: 400; color: #000000;\">A more quickly impact<\/span><\/td>\n<td><span style=\"font-weight: 400; color: #000000;\">A delayed impact<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400; color: #000000;\">Reaction to rate hikes<\/span><\/td>\n<td><span style=\"font-weight: 400; color: #000000;\">Less negative<\/span><\/td>\n<td><span style=\"font-weight: 400; color: #000000;\">More negative<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400; color: #000000;\">Reaction to rate cuts<\/span><\/td>\n<td><span style=\"font-weight: 400; color: #000000;\">Less positive<\/span><\/td>\n<td><span style=\"font-weight: 400; color: #000000;\">More positive<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400; color: #000000;\">Fund holdings &amp; maturity<\/span><\/td>\n<td>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400; color: #000000;\">Allocation across short-term maturities<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400; color: #000000;\">Maximum average maturity for the fund of 150 days<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400; color: #000000;\">Maximum maturity of any single instrument in the fund of 396 days (i.e. 13 months)<\/span><\/li>\n<\/ul>\n<\/td>\n<td>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400; color: #000000;\">Allocation across different maturities<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400; color: #000000;\">Minimum 51% of the fund must be in instruments with a maturity of 1.5 years or higher<\/span><\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<tr>\n<td><span style=\"color: #000000;\"><span style=\"font-weight: 400;\">Revaluation frequency <\/span><i><span style=\"font-weight: 400;\">(more on fund revaluation below)<\/span><\/i><\/span><\/td>\n<td><span style=\"font-weight: 400; color: #000000;\">Daily (marked to market)<\/span><\/td>\n<td>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400; color: #000000;\">Held to maturity instruments: amortized cost<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400; color: #000000;\">Other instruments: marked to market:<\/span><\/li>\n<\/ul>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400; color: #000000;\">Annually (more volatile),<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400; color: #000000;\">Quarterly (moderately volatile), or<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400; color: #000000;\">Monthly (less volatile)<\/span><\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span style=\"font-weight: 400; color: #000000;\">Source: Rumble Research<\/span><\/p>\n<h1><\/h1>\n<h1><span style=\"font-weight: 400; font-size: 24px; color: #000000;\">What does \u201cfund revaluation\u201d mean?<\/span><\/h1>\n<p><span style=\"font-weight: 400; color: #000000;\">In calculating the fund\u2019s net asset value (NAV), fixed-income funds tend to reevaluate their holdings depending on the accounting treatment applied to the securities they hold.<\/span><\/p>\n<p><span style=\"font-weight: 400; color: #000000;\">For instance:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"color: #000000;\"><span style=\"font-weight: 400;\">Instruments classified as <\/span><b>held to maturity (HTM)<\/b><span style=\"font-weight: 400;\"> are carried at amortized cost and are therefore not impacted by daily market price movements<\/span><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"color: #000000;\"><span style=\"font-weight: 400;\">Securities measured at fair value or <\/span><b>marked to market (MTM)<\/b><span style=\"font-weight: 400;\"> are revalued periodically and reflect changes in interest rates and market conditions.<\/span><\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400; color: #000000;\">For valuation purposes, liquid securities are typically priced using the average traded price of the day, while illiquid instruments are valued using the last available transaction price\u2014all quoted on the Egyptian Exchange.<\/span><\/p>\n<p><span style=\"font-weight: 400; color: #000000;\">Although certain provisions, such as accrued expenses or tax-related items, are purely accounting entries and do not negatively affect NAV, they often have a slightly positive impact through income accrual.<\/span><\/p>\n<p><span style=\"font-weight: 400; color: #000000;\">Reevaluation, on the other hand, is triggered either by regulatory requirements, as IFRS mandates periodic fair-value assessment, or by practical considerations, such as increased redemption activity that necessitates greater liquidity and may force a reclassification from HTM to MTM.<\/span><\/p>\n<p><span style=\"font-weight: 400; color: #000000;\">Mark-to-market valuation is particularly favorable in a declining interest rate environment, as bond prices rise, and it also gives fund managers greater flexibility to actively trade and realize capital gains.<\/span><\/p>\n<h1><\/h1>\n<h1><span style=\"font-weight: 400; font-size: 24px; color: #000000;\">The bottom line<\/span><\/h1>\n<p><span style=\"font-weight: 400; color: #000000;\">In a nutshell:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"color: #000000;\"><b>Money-market funds<\/b><span style=\"font-weight: 400;\"> are cash-management tools with minimal duration risk (interest rate risk), while<\/span><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"color: #000000;\"><b>Fixed-income funds<\/b><span style=\"font-weight: 400;\"> are rate-sensitive investment vehicles whose returns depend heavily on the interest-rate cycle and bond price movements.<\/span><\/span><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400; color: #000000;\">If you are an investor with a short-term investment horizon and looking to park some cash on the sideline, then money-market funds are for you.<\/span><\/p>\n<p><span style=\"font-weight: 400; color: #000000;\">On the other hand, if you are an investor with a long-term investment horizon and looking to generate higher returns over time, then fixed-income funds are for you but you need to keep in mind that fixed-income funds are more volatile when it comes to the impact of revaluation which is usually positive when interest rates decline and negative when interest rates increase.<\/span><\/p>\n<p><span style=\"color: #000000;\"><b>In view of the current easing cycle by the Central Bank of Egypt (CBE), long-dated debt securities should benefit the most. Thus, fixed-income funds will be more positively impacted by lower interest rates as opposed to money-market funds.<\/b><\/span><\/p>\n<p><span style=\"font-weight: 400; color: #000000;\">On Thndr, there are currently a total of 10 fixed-income funds that can be split between money-market funds and fixed-income funds, which you can choose from to match your profile:<\/span><\/p>\n<p>&nbsp;<\/p>\n<table>\n<tbody>\n<tr>\n<td><span style=\"color: #000000;\"><b>Money-Market Funds (Asset Manager)<\/b><\/span><\/td>\n<td><span style=\"color: #000000;\"><b>Fixed-Income Funds (Asset Manager)<\/b><\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400; color: #000000;\">1. ADM &#8211; Diamond Fund (AAIM)<\/span><\/td>\n<td><span style=\"font-weight: 400; color: #000000;\">1. ABR &#8211; Bareeq (AAIM)<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400; color: #000000;\">2. ATD &#8211; Al Ahly Tamayoz Dividends (AFIM)<\/span><\/td>\n<td><span style=\"font-weight: 400; color: #000000;\">2. BSC &#8211; B Secure (Beltone)<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400; color: #000000;\">3. AZN &#8211; AZ Nasser Fund (Azimut) *<\/span><\/td>\n<td><span style=\"font-weight: 400; color: #000000;\">3. AIS &#8211; Istithmar wi Aman (AAIM)<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400; color: #000000;\">4. AZS &#8211; AZ Savings Fund (Azimut)<\/span><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400; color: #000000;\">5. MTF &#8211; Misr Takaful Fund (AAIM) *<\/span><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400; color: #000000;\">6. PCM &#8211; PFI Cashi Fund (PFI)<\/span><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400; color: #000000;\">7. PGM &#8211; GIG Money Market (PFI)<\/span><\/td>\n<td><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span style=\"font-weight: 400; color: #000000;\">* Sharia compliant<\/span><\/p>\n<p><span style=\"font-weight: 400; color: #000000;\">Source: Thndr<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Here is how you can benefit from Egypt\u2019s declining interest rates when choosing between money-market funds and fixed-income funds. 24 January 2026 Amr Hussein Elalfy Almost 30 years ago, I had a discount brokerage account in the United States, through which I traded US stocks. One day, I received a communication message from my broker [&hellip;]<\/p>\n","protected":false},"author":38,"featured_media":15335,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[186],"tags":[],"class_list":["post-15334","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-company-news"],"_links":{"self":[{"href":"https:\/\/thndr.horizondm.com\/blogpost\/wp-json\/wp\/v2\/posts\/15334","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thndr.horizondm.com\/blogpost\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thndr.horizondm.com\/blogpost\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thndr.horizondm.com\/blogpost\/wp-json\/wp\/v2\/users\/38"}],"replies":[{"embeddable":true,"href":"https:\/\/thndr.horizondm.com\/blogpost\/wp-json\/wp\/v2\/comments?post=15334"}],"version-history":[{"count":4,"href":"https:\/\/thndr.horizondm.com\/blogpost\/wp-json\/wp\/v2\/posts\/15334\/revisions"}],"predecessor-version":[{"id":15344,"href":"https:\/\/thndr.horizondm.com\/blogpost\/wp-json\/wp\/v2\/posts\/15334\/revisions\/15344"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thndr.horizondm.com\/blogpost\/wp-json\/wp\/v2\/media\/15335"}],"wp:attachment":[{"href":"https:\/\/thndr.horizondm.com\/blogpost\/wp-json\/wp\/v2\/media?parent=15334"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thndr.horizondm.com\/blogpost\/wp-json\/wp\/v2\/categories?post=15334"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thndr.horizondm.com\/blogpost\/wp-json\/wp\/v2\/tags?post=15334"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}