Technology and big data analysis drive 80-time average growth in fund size at world’s most-used money market fund platform
- Since its move to include funds from outside managers, Yu’e Bao has expanded into a cash management platform with 20 funds
- Move to offer more fund choices have come after its flagship money market fund grew to the world’s biggest, raising systemic concerns
Ant Financial Services Group, which operates online payments for the world’s largest e-commerce platform, has seen assets under management grow 80 times for the 13 money market funds on its Yu’e Bao online cash management platform.
That has boosted assets for the distribution platform which was originally known for the Yu’e Bao money market fund operated by Tianhong Asset Management. The fund had 1.13 trillion yuan (US$168 billion) in net assets at the end of 2018, making it the world’s largest, according to figures provided by Tianhong, which is 51 per cent owned by Ant Financial, which operates the service Alipay. Alibaba Group Holding, the parent of Ant Financial, also owns South China Morning Post.
Originally set up partly to manage the money transacted through Alibaba’s e-commerce platforms Taobao and Tmall Marketplace, Yu’e Bao started with just one money market fund launched by Tianhong Asset Management in 2013.
With the phenomenal growth at Yu’e Bao, tracking the boom in online shopping and smartphone-enabled e-payments across all aspects of daily life in China, Ant Financial moved to expand its offering of money market funds. The e-payment platform has since last May added more funds on to Yu’e Bao, growing it into a platform for managing spare cash within the Alipay mobile application, with 20 funds in total.
Yu’e Bao distributes funds by third-party managers other than Tianhong, which is 51-per cent owned by Ant Financial.
Technology was the main engine driving the performance of its funds, Ant Financial said. Alibaba, the largest e-commerce platform on earth, has also developed a computational capability that can handle 325,000 transactions and 256,000 payments every second, as of 2017.