Alibaba's four-year-old Yu'e Bao surpassed JPMorgan's U.S. government money market fund to become the world's largest.
With 165.6 billion U.S. dollars under management, the Yu'e Bao fund has grown rapidly, reflecting the increasing importance and irreplaceable role of technology and e-commerce in China.
The payments affiliate company of Alibaba, Ant Financial Services Group found that a great deal of cash remains in customers' accounts, which could be used for a fund. The Yu'e Bao fund was therefore born in 2013 and swept the money in those accounts into it.
Due to Yu'e Bao's expansion, Tianhong Fund Management, the co-founder of Yu'e Bao has become the first fund company to break one trillion yuan. Moreover, Yu'e Bao's custodian bank CITIC Bank has also become the largest fund custody institution.
Peter Alexander, managing director of China consultancy Z-Ben Advisors commented that Yu'e Bao has "so many individual accounts they are able to have the power to negotiate with banks, and because the duration is very short, they also have high liquidity."
An analyst at Tianhong Fund Management said that their company gives top priority to the liquidity of capital flows, but they also take every measure to balance the yield rate, liquidity and financial risks.
Alibaba's four-year-old Yu'e Bao surpassed JPMorgan's U.S. government money market fund to become the world's largest.
The payments affiliate company of Alibaba, Ant Financial Services Group found that a great deal of cash remains in customers' accounts, which could be used for a fund. The Yu'e Bao fund was therefore born in 2013 and swept the money in those accounts into it.
