China’s largest money-market fund expanded 23 percent in the first quarter as features such as the ability to make credit-card payments and shop online helped draw clients even as competitors’ assets shrank because of a stocks rally.
Yu’EBao, which is also the world’s fourth-biggest money fund, saw its assets under management rise by 132.8 billion yuan ($21.4 billion) from the end of last year to 711.7 billion yuan as of March 31, according to a report issued Wednesday by the fund’s manager, Tianhong Asset Management Co. The size of all money-market funds increased 78.8 billion yuan to 2.2 trillion yuan, Asset Management Association of China data show.
Industry growth slowed to 3.8 percent in the first quarter from 18 percent in the September-December period even as stocks in Shanghai surged 16 percent. Yu’EBao is sold on Alibaba Group Holding Ltd.’s Taobao marketplace, and can be used to make credit-card payments, and buy products.
“This isn’t a traditional money-market fund in the sense that online payment activities instead of capital market performance have a bigger impact on its size,” Liu Changjiang, a Shanghai-based analyst at Essence Securities Co., said by phone Wednesday. “We’ll probably see market growth slow, while that particular product continues to increase along with expanding online payment activities.”
Alibaba’s financial arm Zhejiang Ant Small & Micro Financial Services Group Co., which owns the Alipay online payment system, holds 51 percent of Tianhong, according to the asset manager’s website. Tianhong’s total assets under management, including those of its units, surged 20 percent in the first quarter to 942.3 billion yuan, according to an e-mailed statement Wednesday.
The Shanghai index of stocks more than doubled from a year ago to touch 4,400.19 Wednesday, the highest level since March 2008, as investors opened a record 1.68 million new stocks accounts in the week ended April 10. The one-month Shanghai Interbank Offered Rate fell to 3.91 percent, the lowest since November, after the People’s Bank of China cut benchmark interest rates and reserve-requirement ratios twice to support an economy growing at the slowest pace since 2009. Yu’EBao’s seven-day average return was 4.44 percent Tuesday, data from the company website show.
— With assistance by Helen Sun