Bloomberg on China's Yu'EBao MMF
Bloomberg writes "China's Biggest Money Fund Grows as Peers Lose to Stocks Rally", which says, "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." [Note: This would make `Yu-EBao Money Fund approximately $114.7 billion, which would make this the second largest money funds in the world, behind Vanguard Prime MMF but now ahead of Fidelity Cash Reserves and JPM Prime MMF according to Crane Data's latest figures.] The Bloomberg piece adds, "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." In other news, Funds Europe writes "HSBC money market fund withstands large exit". The article says, "The first multi-billion euro money market fund to experience a large outflow after its yield turned negative, managed the crunch without incident, a report by Moody's says. The study of the E1.6 billion outflow from the HSBC Euro Liquidity Fund that took place last week comes a month after regulators announced a study of systemic risk in asset management. The net negative yield posted by the fund sent investors for the exits and marked the first time that a multi-billion euro prime constant net asset value, or CNAV, money market fund has fallen victim to the European Central Bank's quantitative-easing policy, which has pushed yields to a record low, Moody's says. "The fund managed the outflow without incident, a credit positive, especially because Moody's expects other funds to be similarly tested," says Vanessa Robert, a Moody's senior credit officer. "We expect more of the E90 billion prime CNAV MMF [money market fund] sector to turn negative in the coming weeks. This may create reallocations within the sector, but no outflows from the sector. MMFs continue to offer a good value proposition on a relative basis given that custodian banks are offering even more negatively yielding deposit rates.""
