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China’s largest fund manager Tianhong lifts cap for Yu’e Bao subscription

Written by Song Jingli Published on 

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Prepare to be flushed with cash.

Tianhong Asset Management, which manages Ant Financial’s money market fund Yu’e Bao, announced on Tuesday that it will remove all subscription limits for individuals investing in China’s first internet fund.

The new measure comes into effect on Wednesday, and is designed to meet demands by investors who wish to be more hands-on when managing their assets.

Ant Financial owns 51% of Tianhong, which managed Tianhong Yu’e Bao money market fund worth RMB 1.13 trillion (USD 168 billion) at the end of 2018, a drop from the total of RMB 1.58 trillion in 2017, according to Tianhong’s annual reports on Yu’e Bao.  Tianhong Yu’e Bao money market fund is only one of the 20 funds on Yu’e Bao platform.

There have been different caps for Yu’e Bao in the past two years. In 2017, Tianhong slashed the overall individual subscription limit from RMB 1 million to RMB 100,000. Then, in January 2018, Tianhong, while maintaining the entire cap, even tightened the reins by setting a daily cap, allowing each subscriber to invest up to RMB 20,000 per day.

The move, which required more steps to subscribe, led to an exodus of investors.

Yu’e Bao, which was first introduced in 2013 on Alipay to offer users a channel to direct their cash into money market funds, became popular due to its low entry point of one yuan and the option of instant withdrawal.

In the past month, the daily return for holding Yu’e Bao funds worth RMB 100,000 was between 61 and 68 yuan.

Contact the writer at jingli@kr-asia.com

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