Bloomberg on China's Yu'E Bao
Bloomberg writes "World's Biggest Money-Market Fund Can Grow More, Fitch Says." The article says, "Yu'E Bao, the world's biggest money-market fund, still has potential to grow more even after it expanded at the fastest half-year pace in three years in the first six months of 2017, according to Fitch Ratings. The Chinese fund is sold on the mobile-payment platform Alipay, offered by Alibaba Group Holding Ltd.'s financial affiliate, which is controlled by Jack Ma.... Yu'E Bao has 1.4 trillion yuan ($210 billion) of assets under management, accounting for about 28 percent of China's money-market funds." It adds, "Chinese money-market funds have gotten an extra boost this year, after the government sparked an increase in short-term bond yields as it cracked down on leverage in the financial system. The seven-day annualized yield offered by Yu'E Bao has averaged 3.87 percent in 2017, according to Bloomberg-compiled data. That compares with 3.74 percent on all local money-market funds this year, according to research firm Howbuy. The flood of money into Yu'E Bao may have prompted Tianhong Asset to seek ways to control risks, said Fitch's Huang. The company lowered the investment cap in the fund to 100,000 yuan earlier this month. But the rule change may not alter the growth trend, said Huang.... Recent figures underscore how Yu'E Bao is driving expansion in the industry. Its assets under management rose by 623 billion yuan in the first half of this year. That accounted for the bulk of the 822 billion yuan expansion in all Chinese money-market funds, according to the Asset Management Association of China."
