DCA Simulator
What it does
Dollar-Cost Averaging (DCA) means investing a fixed amount at regular intervals rather than all at once. The DCA Simulator projects what happens when you invest a fixed KES amount into a chosen bond every month (or every auction cycle), compounding the coupon income over time.
It shows the total amount invested, total coupons earned, reinvestment income, and the final portfolio value at the end of your chosen horizon — alongside a period-by-period table.
When to use it
- You receive a regular salary and want to invest a fixed amount every month into bonds.
- You want to compare DCA into a short-term bond (rolling every 2 years) versus locking into a 10-year bond once.
- Building up bond savings incrementally toward a long-term goal such as school fees or retirement.
KES 20,000/month into FXD bonds over 5 years
You invest KES 20,000 per month for 5 years (60 months) into FXD bonds with an assumed average coupon of 14.5%. Coupons are reinvested at 13%. Total outlay: KES 1,200,000.
Example output
| Period | Cumulative Invested | Coupons Earned (to date) | Portfolio Value |
|---|---|---|---|
| Year 1 | KES 240,000 | KES 17,400 | KES 257,400 |
| Year 2 | KES 480,000 | KES 69,600 | KES 549,600 |
| Year 3 | KES 720,000 | KES 156,600 | KES 876,600 |
| Year 4 | KES 960,000 | KES 279,240 | KES 1,239,240 |
| Year 5 | KES 1,200,000 | KES 439,020 | KES 1,639,020 |
By year 5 your KES 1.2M outlay has grown to KES 1.64M — a KES 439,020 gain (36.6% total return, approximately 6.4% annualised net of WHT). The compounding effect of reinvesting each coupon into more bonds accelerates the growth in later years.
Limitations
- Assumes a constant coupon rate throughout the simulation. In reality, DCA into bonds means each purchase is at a different yield depending on market conditions at that time.
- The CBK minimum bid is KES 50,000 — KES 20,000/month means you must accumulate for 2–3 months before each purchase, so the simulation is an approximation of real DCA behaviour.
- Does not model partial-period purchases or auction availability gaps.