Alibaba’s money fund Yu’E Bao belongs to Tianhong Asset Management, which was found on May 29 in 2013. How did Yu’E Bao perform in the past 2013?
The Growth of Yu’E Bao
By the end of 2013, there were 89 fund management companies in mainland China in charge of 1,552 funds. The total funds size reached 3 trillion yuan (USD 486.67 billion). When Yu’E Bao was set up in May, its size was 200 million yuan (USD 32.44 million). It hit 185.3 billion yuan (USD 30.06 billion) by the end of 2013, accounted for 6% of fund market and became the largest single fund in China.
By the middle of February in 2014, Yu’E Bao fund size reached 400 billion yuan (USD 64.89 billion). It was estimated to reach 500 billion yuan (USD 81.11 billion) in March 2014.
Who Invested in Yu’E Bao?
By the end of 2013, there were 43.03 million people purchased Yu’E Bao money fund, while the number of A-share stockholders in China was merely 53.85 million. Considering the fact that many investors hold two A-share accounts (one in Shanghai, one in Shenzhen), the number of Yu’E Bao users surpassed the number of stockholders. Besides, the number of fund accounts (by the end of 2012) was 76.36 million.
By February 26 in 2014, the number of Yu’E Bao users hit 81 million.
How Did Yu’E Bao Make Profit?
In 2013, Yu’E Bao made 2.014 billion yuan (USD 326.72 million), 93% came from deposit interest and only 4% came from bond interest.
In 2013, the expenditure of Yu’E Bao was 224 million yuan (USD 36.34 million), accounted for 11% of total income. The net income accounted for 89%, which was 1.79 billion yuan (USD 290.38 million).
Alibaba paid Tianhong Asset Management 190 million yuan (USD 30.82 million) which accounted for 85% of expenditure. Manager’s renumeration accounted for 46%, and trailer fee accounted for 39%. Besides, trustee bank China CITIC Bank was paid 280 million yuan (USD 45.42 million).
Where Did Yu’E Bao Invest?
The investment risk of Yu’E Bao was extremely low, data showed that 92% of Yu’E Bao fund was deposit, and 7% bond investment.
About 0.05% of Yu’E Bao fund was demand deposit. Within 1 month time deposit, 1-3 months time deposit and 3 months above time deposit each accounted for 29%, 48% and 23%.