Tianhong looks to develop equity ETFs
Tianhong Asset Management, whose money market fund had been sold to one in nine mainlanders through e-commerce giant Alibaba's online platform, plans to apply for a licence to invest onshore capital in overseas markets.
The mainland's biggest asset manager, Tianhong Asset Management, whose money market fund had been sold to one in nine mainlanders through e-commerce giant Alibaba's online platform, plans to apply for a licence to invest onshore capital in overseas markets.
The firm, controlled by Alibaba chairman Jack Ma Yun's online payments platform Alipay, is looking beyond its star product, money market fund Yu E Bao, which has 150 million mainland clients. The company is now mulling putting new products on its online shelf, after Yu E Bao growth began to stagnate from July amid falling yield.
Tianhong was placing new hope in equities, with plans to launch exchange-traded funds that track the onshore A-share market or overseas equity indices, its deputy general manager, Xiaoming Zhou, said yesterday.
"We are preparing new products apart from the existing money market fund," Zhou said. "We have been paying more attention to equity-related products, in particular exchange-traded funds."
Tianhong planned to apply for a QDII (qualified domestic institutional investor) licence, a preliminary qualification a mainland asset manager needs to obtain before investing onshore yuan in foreign securities markets, Zhou said.
In June last year, Tianhong teamed up with Alipay to launch Yu E Bao to allow Alipay customers convert the idle cash in their accounts into units of a money market fund. It grew very quickly in the following 12 months. Yet from July, its assets began declining as yields fell below 5 per cent a year. By the end of third quarter, the fund size stood at 534 billion yuan (HK$674 billion), 40 billion yuan less than in July.