Ant Financial’s Yu’e Bao shrinks 39 per cent, loses top spot as world’s biggest money market fund, says Fitch Ratings
- Negative real yields and more competition from banks’ wealth management services caused the Chinese fund to shed 39 per cent of its assets
- Artificial intelligence, data analytics helped Yu’e Bao evolve into a multi-fund platform, as investors’ capital continues to fan out to more fund managers
Yu’e Bao, the money market fund distributed on Ant Financial’s payment network, Alipay, has lost its top ranking as the world’s biggest such fund, according to Fitch Ratings.
The fund has shrunk by 39 per cent from its peak in March last year as negative real yields and keener competition from banks’ wealth management products triggered an outflow of money.
As of June, Yu’e Bao’s assets under management stood at 1.03 trillion yuan (US$150 billion), down from 1.69 trillion (US$267 billion) in March 2018, according to Fitch.
Yu’e Bao is managed by Tianhong Asset Management, which is 51 per cent controlled by Ant Financial, an affiliate of Alibaba Group. Alibaba owns the South China Morning Post.
The money market fund (MMF) has been symbolic of China’s advance in online trading of goods, as it was set up originally in 2013 by e-commerce and internet payment giant Alibaba to help users of Alipay invest their idle cash. Its innovation, which also allows online shoppers to directly make payment by cashing out from the fund, placed it well ahead of its western peers, such as Amazon.