Oct 24, 2018 (China Knowledge) - As the largest fund in the market, Tianhong Yu’e Bao’s scale dropped by about RMB 130 billion in the third quarter, the second consecutive quarter of decline since the opening of this year's Yu’e Bao platform.
At the end of the first quarter of this year, Tianhong Yu’e Bao reached RMB 1.6892 trillion, and became the largest monetary fund in the world. Over a half-year period, its scale has decreased by RMB 365.3 billion, almost equal to the total size of asset management of a large fund company.
According to industry experts, the size dropped substantially due to following factors:
Firstly, the regulatory policy tends to be stricter and the super large monetary fund is limited. Yu’e Bao, from April 1st, strictly complied with the new regulations and standards for liquidity risk management of public funds, which negatively affected its growth.
Secondly, the yield of the monetary fund has been gradually downward since April. From the end of the second quarter of last year to the end of the first quarter of this year, the 7-day annual yield of the fund Yu’e Bao has remained roughly around 4%, but it has been down all the way since then, falling to 2.67% as of October 21.
Thirdly, Ant Financial platform diversion is an important reason. Since May, Ant Financial has been connected to a number of fund companies under the monetary fund, as of September it has been connected to 11 money funds. Yu’e Bao has changed to a financial platform shared by more than 10 funds.
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