Chart of the Day: Returns Tumble at Largest Money-Market Fund
The annualized rate of return on investment through Yu’e Bao, the world’s largest money-market fund, has remained under 3% for eight consecutive days as of Monday, after slipping below the milestone for the first time in almost two years.
On Monday, the annualized yield of the fund, which was launched by e-commerce giant Alibaba Group Holding Ltd.’s financial affiliate, Ant Financial Services Group, dropped to 2.883%, according to data from AliPay (China) Internet Technology Co. Ltd. For the first six months of 2018, the fund’s average annualized rate of return stood at around 4%, according to Caixin calculations.
On Sept. 17, the fund’s annualized rate of return fell below 3% for the first time since the end of 2016. Analysts cited ample money supply in the interbank market as a possible trigger for the drop.
Yu’e Bao, which in Chinese literally means “leftover treasure,” has ballooned in size since its launch in 2013, as hundreds of millions of Ant Financial’s mobile payment platform’s users put their spare change into the fund. In 2017, it overtook JPMorgan Chase & Co.’s U.S. government money-market fund to become the world’s biggest such fund.
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