Last week, The Financial Times published the piece, "China money market funds' rush into bank credit worries investors," which tells us, "Investors have warned of growing systemic risks in China's $1.09tn money market fund industry, as funds buy up bank credit despite a surge in bad debt this year. Comparably high yields and low risk at Chinese money market funds in recent years have made the industry a favourite among retail investors in the country. Assets under management have grown from Rmb600bn at the end of 2012 to an estimated Rmb7.3tn ($1.09bn) in March, making it the second-largest market in the world after the US. But in recent months China's central bank has tightened monetary policy and access to credit, forcing down the funds' once-attractive yields. At the biggest funds, average returns have dropped to an annualised to 3.7 per cent from about 4.5 per cent at the start of the year. In response, funds have rushed into bank credit, such as negotiable certificates of deposit, as a means to boost returns and continue attracting retail investments." The piece explains, "A big default at a small bank could send a shock through the money market fund industry, said Ivan Shi, director of data and analytics at Z-Ben Advisors in Shanghai. Exposure to negotiable certificates of deposit have reached high levels among some funds. For example, Shenzhen-based Yinhua Fund, one of China's largest money market funds, has a 60 per cent exposure to negotiable certificates of deposit at the end of March, according to research from Z-Ben Advisors. The exact level of risk associated with these investments is unclear because the funds do not publicly disclose what type of bank credits they have invested in, said Mr Shi. The fear is that many funds have bought into the credit of the small, weak banks." The article quotes him, "It's all based on how much exposure they have to small banks -- which we can't see." (See also, the South China Morning Post's article, "Hong Kong's first money market ETF draws investors with expected 1.5 per cent return, low risk," and the FT's "New Rules for Europe's E1.3tn money market fund sector".)