Alibaba's Fund Management Platform Yu'ebao Lowers Individual Investment Limit to USD15,000
Du Chuan | Song Yikang
DATE:  Aug 14 2017
/ SOURCE:  Yicai
Alibaba's Fund Management Platform Yu'ebao Lowers Individual Investment Limit to USD15,000 Alibaba's Fund Management Platform Yu'ebao Lowers Individual Investment Limit to USD15,000

(Yicai Global) Aug. 14 -- Yu'ebao, Alibaba Group's online fund management platform, has decided to lower the upper limit of investments by individual account holders to CNY100,000 (USD15,000). However, the majority of Yu'ebao users will not be affected by the decision, a market insider told Yicai Global.

Balances in individual investors' Yu'ebao accounts will be capped at CNY100,000 from today, the platform's manager, Tianhong Asset Management Co., said in a statement on Aug. 11, adding that the decision was made to safeguard Yu'ebao's stability and investors' interests.

Yu'ebao is positioned as a small-sum cash management tool, and the average investment per investor is less than CNY10,000, so the change in policy will only affect a small proportion of its customers, an industry insider told Yicai Global.

Having established itself as the largest money fund in the world, Yu'ebao no longer needs to prioritize asset growth, opined professor Guo Tianyong at the School of Finance in Beijing's Central University of Finance and Economics. Instead, its first priority now is to ensure sustainable and healthy development of its asset management business, Guo continued.

With the new policy, the fund will slow down its pace of asset growth in line with its positioning as a wealth management service for small investors, he added, and this will help improve the robustness of its operations, and make investment management easier. 

Proactive adjustment to fund subscription limits is a common practice among asset management companies, and Tianhong's decision to slow down asset growth for Yu'ebao is intended to make the financial product platform "even more robust," which will prove beneficial to the fund in the long term, said Zhao Qingming, chief economist at China International Capital Corporation.

The customers with more than CNY100,000 in their Yu'ebao accounts do not need to withdraw the excess amount and will continue to receive investment yields for the total amount of money in their accounts, Tianhong Asset Management confirmed.

In response to a question of whether the company will lower the investment limit further in future, a source at Tianhong said the company did not have such plans.

Yu'ebao's assets under management hit CNY1.43 trillion as of the end of June, making it the largest money fund in the world, public information shows.

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Keywords:   Alibaba,Yuebao,Tianhong,Internet Fund,Money