WSJ: Yu'e Bao Limits Flows
The Wall Street Journal writes "World's Largest Money-Market Fund Caps Daily Investment." The article tells us, "The world's largest money-market fund will limit the daily amount individuals can invest in it, taking further steps to slow inflows after Chinese regulators raised concerns about its rapid growth. Yu'e Bao, a $235 billion online money-market fund run by an affiliate of Alibaba Group Holding Ltd., will cap daily investments by individuals to 20,000 yuan ($3,022) starting Friday, its manager said in a statement Thursday. The manager, Beijing-based Tianhong Asset Management Co., this past summer imposed a 100,000 yuan limit on the size of new individual accounts." The piece adds, "Tianhong said Thursday it aims to maintain stable operations at the money-market fund and adhere to its purpose as a cash-management vehicle.... Yu'e Bao, whose name means 'leftover treasure' in Chinese, was started four years ago and draws funds from users of Alipay, a popular online and mobile payments network used by scores of Chinese citizens. Thanks in large part to the fund's generous investment yields -- which were 3.99% Thursday on an annualized basis -- its assets have doubled over the past year.... The fund's rapid asset growth has sparked concerns from China's securities regulator, which oversees the country's $1 trillion money-market fund industry. The China Securities Regulatory Commission responded this past fall by tightening liquidity rules and investment guidelines for money-market funds to tame what it called 'unruly growth' in the industry."
