Biz / Tech

Alipay introduces two new funds to ease pressure on Tianhong

Alibaba's financial affiliate Ant Financial will introduce two more funds to Yu'e Bao in addition to the existing fund by Tianhong Asset Management Co.

Alibaba's financial affiliate Ant Financial will introduce two more funds to Yu'e Bao in addition to the existing fund by Tianhong Asset Management in a bid to loosen capital pressure on the latter.

The two new funds will be connected to the popular cash management tool Yu'e Bao, literally meaning "Leftover Treasures," which was launched in 2013.

It was designed to connect Alipay users' account balances with money market funds so that they can enjoy interest from the mutual fund before using it to make online and offline purchases.

Tianhong Asset Management Co's fund quickly grew to become the largest of its kind in the world, with more than 400 million users and over 1.6 trillion yuan (US$254 billion) in assets.

An individual Alipay user is subject to an upper limit of 100,000 yuan of Tianhong money market fund assets in their accounts, and a daily total subscription cap was also introduced earlier this year to ensure the market size isn't overblown. 

Two new funds from Bosera Asset Management and Zhong Ou Asset Management will be connected with Yu'e Bao. Starting from today, users will be given the option of shifting their Tianhong money market to either one of the new funds, or to keep their assets in Tianhong. 

The new option will be rolled out gradually to cover all Alipay users in several phases, and subscribers to the Bosera or Zhong Ou funds will not be subject to subscription limits for the time being.

"We look forward to adding other high-quality money market funds to the Yu’e Bao platform, giving users more choice and our partners the opportunity to connect with a much broader user base,” said Zu Guomin, vice president of Ant Financial's Wealth Management Business Group. It currently works with more than 100 fund companies to allow users easier access to investment options.

“It's also in line with our commitment to using technology to make financial services more inclusive, and to working closely with traditional financial institutions,” he added.


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