Tianhong Slashes Yu’e Bao Fees for First Time in 12 Years Amid Industry Shake-Up
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When Yu’e Bao launched in 2013, its seven-day annualized yield once exceeded 6%
Tianhong Asset Management Co. Ltd. has trimmed the fees on its flagship Yu’e Bao money market fund for the first time since its launch in 2013, as China’s fund industry undergoes a broad-based cost-cutting drive.
In a Sept. 23 announcement, the company said the annual custodian fee for Yu’e Bao would be lowered to 0.07% from 0.08%, bringing its total operating expense ratio to 0.62%. The move follows similar fee cuts by other fund managers, including China Reform Securities Fund Management Co. Ltd. and E Fund Management Co. Ltd.
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- Tianhong Asset cut Yu’e Bao’s custodian fee from 0.08% to 0.07%, reducing its operating expense ratio to 0.62%.
- The move aligns with regulator-driven reforms since July 2023 to lower fund costs amid declining money market yields and investor outflows.
- Money market fund assets fell by 287.8 billion yuan to 13.3 trillion yuan in Q1 2025, the first such drop in a first quarter since 2020.
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Who’s Who
- Tianhong Asset Management Co. Ltd.
- Tianhong Asset Management Co. Ltd. (天弘基金管理有限公司) is a Chinese fund management company. It is notable for trimming fees on its flagship Yu'e Bao money market fund, a first since its 2013 launch. This fee reduction is part of a broader structural reform campaign by regulators to lower investor costs. Yu'e Bao previously attracted many investors with high yields, which have since declined due to falling interest rates and regulatory crackdowns.
- China Reform Securities Fund Management Co. Ltd.
- China Reform Securities Fund Management Co. Ltd. (华夏基金管理有限公司) has lowered its fees as part of a broader industry trend. This action follows a regulatory campaign to reduce costs for investors, impacting money market funds struggling with declining yields and investor outflows.
- E Fund Management Co. Ltd.
- E Fund Management Co. Ltd. is a fund manager mentioned in the article. It has also undertaken fee cuts, following a broader industry trend of cost reduction in response to regulatory reforms aimed at lowering investor costs. This initiative comes amidst declining yields in money market funds.
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What Happened When
- 2013：
- Tianhong Asset Management Co. Ltd. launched the Yu’e Bao money market fund.
- July 2023：
- Regulators initiated a structural reform campaign to lower costs for investors.
- 2024：
- Yields of some money market funds, including Yu’e Bao, fell below 1% as interest rates trended downward.
- Late 2024：
- Regulatory crackdown on interbank deposits as part of efforts to curb non-compliant banking practices, leading to reduced holdings of these assets by funds.
- First quarter of 2025：
- Total net asset value of money market funds fell by 287.8 billion yuan to 13.3 trillion yuan, marking the first time the sector shrank in a first quarter since 2020.
- September 5, 2025：
- China Securities Regulatory Commission released draft rules proposing to cap sales service fees for money market funds at 0.15% per year.
- September 23, 2025：
- Tianhong Asset Management Co. Ltd. announced it would lower the annual custodian fee for Yu’e Bao to 0.07% from 0.08%, reducing the total operating expense ratio to 0.62%.
AI generated, for reference only
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