If the same thing is the preference for Yu’e Bao and the lavishness of the shot, then what has changed is undoubtedly the holding income, which is not as good as before.
Recently, Tianhong Yu’ebao’s 7-day annualized rate of return has continued to decline. On August 28, the 7-day annualized rate of return was 1.3660%, approaching the historical low since its establishment. Calculated, 10,000 yuan is saved for one year, and the income Less than 150 yuan, only about 137 yuan.
As a “national wealth management artifact” with more than 700 million households, it has affected not only large households holding 200 million yuan, but also the wallet of every ordinary investor. The catfish effect it brings makes fund companies and channels continue to reshuffle in the development process of monetary funds, forming a new industry pattern.
Monetary funds started in 2003, and this year is just the 20th year. From nothing, currency funds have experienced savage growth, rapid expansion, and even once accounted for more than 60% of the industry’s management scale. Even with the impact of industry regulation and various product innovations, it has still passed the 10 trillion mark, and some products have even surged 400 times in less than 4 years.
However, today, with the great development of rights and interests, although the scale of currency funds is still high, it is no longer the main position for fund companies to show their muscles. Under the influence of factors such as no new product issuance in the past 4 years, and the rate of return continues to decline, the future What changes will the currency fund face?
Yu’ebao’s 7-day annualized rate of return is approaching historical lows
Since August, Tianhong Yu’ebao’s 7th annualized rate of return has continued to decline. As of August 28, the 7th annualized rate of return was as low as 1.3660%, approaching the previous historical low.
Tianhong Yu’ebao seven-day annualized yield
This currency fund, which was born in 2013, has more than 700 million users by the end of 2021. It has long been known as a “national wealth management artifact”. You may not be familiar with currency funds, but when it comes to Yu’ebao, few people do not Know.
In May 2013, when the monetary policy was tight, Tianhong Yu’e Bao came out. At that time, the name was still Tianhong Zenglibao Monetary Fund. The tight monetary policy brought short-term liquidity shortage, but also brought High-yield, in early July 2013, the annualized rate of return on the 7th once reached 6.3%. Although it has fallen back since then, by the beginning of 2014, the annualized rate of return on the 7th reached a record 6.7630%.
However, this high-yield period did not last long. After a brief surge, the annualized rate of return continued to decline on the 7th, falling below 3% in the second half of 2015, and reaching a low of 2.3% in 2016. , the income per 10,000 copies fell to less than 0.62 yuan.
After May 2017, although the annualized rate of return on the 7th once returned to around 4%, it continued to decline after just over a year, and fell below the 2% mark in April 2020, and the time came to 2020 In June, 2019, the annualized rate of return reached a low of 1.3110% on the 7th, setting a new low since its establishment.
Seeing that the income of the account is constantly decreasing, many investors laughed at themselves while posting pictures. In fact, it is more than Tianhong Yu’ebao, and the yields of other money funds in the market are also continuing to decline.
From “2 era” to “1.5 era” to “1 era”, what is the reason behind it?
Tianhong Yu’ebao fund managers Wang Dengfeng, Liu Ying, and Wang Changjun said, “In the second quarter, the long-term bond market has stepped out of a volatile pattern under the expectation of further economic growth pressure, policy force, and mid-term recovery; the short-term benefited from looser Liquidity, the downward trend is obvious.”
Wei Zhen, Managing Director of Bosera Fund and Investment Director of the Second Division of Fixed Income Investment, pointed out: “First, the funding rate in the money market has remained low since April, and the funding rate represented by DR007 has further declined since July. The monthly average of DR007 is 1.56. % fell by 16BP compared to June, and the reinvestment rate of money funds has fallen sharply compared with last year; second, the equity market has adjusted significantly this year, and investors’ risk appetite is relatively weak. Rates and overall cash management wealth management yields are relatively low.”
The largest household no longer earns 5 million a year
As the yield of Yu’e Bao continues to decline, investors who hold Yu’e Bao for a long time will naturally feel very obvious, especially if they have been holding Yu’e Bao since its establishment.
In 2014, when Yu’e Bao’s annualized income exceeded 6.76% on the 7th, Tianhong’s Yu’e Bao with a holding of 10,000 yuan could earn more than 1.8 yuan a day, but now the income of 10,000 yuan a day is less than 0.38 yuan. .
Among the holders of more than 700 million households, it is particularly worth mentioning that the individual investor who is in the “C position” and holds over 200 million yuan.
I still remember that in the summer of 2021, an individual investor threw 220 million yuan in Tianhong Yu’e Bao, and then his attention continued to rise, and he became a hot search.
After sorting out the past holders, the reporter noticed that as early as mid-2019, the first holder already had a holding amount of 220 million yuan. However, the latest data shows that the amount of the first holder has begun to decline, but there is still 200 million yuan.
Compared with the enthusiasm of the first holder, Yu’ebao’s income has changed from “2 era” to “1 era” in the three-year time change.
The reporter compares and estimates the income based on the time point of the semi-annual report. Let’s go back to the summer three years ago, on June 30, 2019. At that time, Yu’ebao’s 7-day annualized rate of return was 2.2990%, and the first holder’s income for one day was 2.2990%. It is about 13,857 yuan, and the annual rate of return is about 5.06 million yuan.
However, the lying earning model with an annual income of 5 million yuan has been greatly reduced after 3 years. Now the 7-day annualized rate of return has dropped to 1.3660%. If you still hold 220 million yuan, the one-day income has dropped to about 8,200 yuan. Yuan, the annual income is about 3 million yuan. Compared to 3 years ago, it is almost a 40% discount.
If it is estimated based on the latest holding amount of 200 million yuan, the one-day income has also dropped to about 7,485 yuan, and the annual income is about 2.73 million yuan.
In the opinion of a fund company in South China, “the lower yields of monetary funds are directly related to the current looser monetary policy; the overall macro environment in the second half of the year may be in the stage of ‘a moderate economic recovery and loose policies’. In a macro environment, low cargo-based yields may become the norm.”
A monetary fund manager in Beijing also said: “Considering the short-term improvement of the economic situation, the probability of future incremental policies is decreasing, and it is difficult for the bond market to break the shock pattern in the short term. It is expected that the liquidity of the money market will remain loose for a long time, and market interest rates will gradually Move closer to the policy rate, but will remain low overall.”
That is to say, as the yield continues to decline, if the investor continues to hold, it is possible to earn 2.73 million yuan while lying down and it will soon become a thing of the past.
However, there are also monetary fund managers who believe: “The worst stage of the economy has passed, and the economy is still in the channel of improvement month-on-month. The flexibility of monetary policy will gradually increase, and there is no motivation for further relaxation. On the whole, monetary policy will be in line with stable growth. , but the room for further easing has narrowed, and the probability of short-term interest rates fluctuating upwards has increased under the background that the money market is far away from the policy rate.”
New options after yields continue to fall
After the exposure of this big player, many investors still worry about it, thinking that it is not a good choice to put more than 200 million yuan of funds in Yu’e Bao.
This actually involves another issue, that is, whether the goods on the Yu’e Bao platform are suitable for long-term financial management. In the opinion of many investors, holding Yu’e Bao may place more importance on the convenience of spare money financial management than the yield. , and the functionality of transaction payment in online shopping.
This is actually the main reason why Yu’e Bao really came out of the circle. It did not win by yield, but effectively combined the roles of investors and shoppers.
The above-mentioned person from a fund company in South China believes: “Investors who have high requirements for capital security and liquidity, but do not have high requirements for yields, can (use Yu’ebao currency fund) as a tool for cash management.”
A monetary fund manager of a fund company in Beijing also said: “As a cash management product, monetary funds still have unique advantages such as convenience, direct consumption, and quick T+0 redemption. They are still a good choice for spare money management. Investors with higher returns and higher risk appetite can further choose stable products such as short-term debt funds and fixed income +.”
From the perspective of the continued decline in the yield of money funds, there are indeed many alternatives for ordinary investors to choose from.
According to Jiyu research statistics, since April this year, the seven-day annualized return of the whole market money fund has entered the “1” era. It is difficult to meet the allocation needs of some individual and institutional investors after the rate of return of cargo-based products continues to decline. Net worth products with relatively high returns and relatively longer holding periods, such as bank certificate of deposit index funds and short-term pure debt funds, are favored by the market.
The reporter also noticed that the issuance of interbank certificates of deposit funds has been extremely popular this year. The scale of newly issued products alone has exceeded 160 billion yuan. In addition to the scale established at the end of last year, the overall stock has exceeded 200 billion yuan. The reason why such products are favored by investors is that, on the one hand, it has a lower risk attribute, and on the other hand, it has higher returns than money funds.
The Jiyu research team also pointed out that, on the whole, interbank depository index funds (required to be held for 7 days or more) are a category that is closer to monetary funds. As of August 18, 2022, the yield of the AAA index of interbank certificates of deposit in the past year was about 2.86%, which was higher than that of monetary funds as a whole.
CSI Interbank Certificate of Deposit AAA Index
A person from a fund company in South China also suggested: “For those investors with extremely low risk tolerance and high liquidity requirements, perhaps the bank’s cash management wealth management products can be used as a substitute for ‘goods-like bases’. Maybe slightly higher than the cargo base.”
“If investors can accept small fluctuations in the net value of products and slightly increase their risk tolerance, they can also consider interbank depository index funds, which will have higher yields. Including short-term debt funds, they can also become ‘commodity-like’ funds. Alternative options, but the key is that investors should have an accurate understanding of the risk-return characteristics of these products.” The fund company further said.
The reporter also noticed that the short-term debt fund also has a relatively obvious growth in scale this year, from less than 800 billion yuan at the end of last year to about 836.1 billion yuan at the end of June this year, and the increase in scale in these two months has exceeded 8400 yuan. In terms of yield, as of August 18, the median yield of short-term pure bond funds this year was 2.13%, and the arithmetic average yield was 1.62%, which was also higher than that of currency funds.
20 years of monetary funds, from 0 to 10 trillion
Although the annualized rate of return is approaching a record low, from the perspective of the overall size of monetary funds, it continues to climb. As of the end of June 2022, the management scale of public money funds in the whole market reached 10.6 trillion yuan.
Looking back at 2003, the first batch of monetary funds was approved. Bosera Fund, Huaan Fund, and China Merchants Fund received approval No. 134-136 of that year respectively. However, Huaan Cash Profit Rate was established first and became the first monetary fund in the history of public offering. .
Han Fanghe, who was the general manager of Huaan Fund at the time, attached great importance to the innovation of fund companies and left the impression that he likes to collect the first in the industry. In addition to the first currency fund, Huaan Fund at that time also issued the first open-end fund. , issued the first index fund.
In January 2004, China Merchants Cash Appreciation Currency and Bosera Cash Income Currency were also established one after another, followed by Taixin Daily Income, Southern Cash Increase Profit, and Changxin Interest Income. In 2004 alone, 8 monetary funds came into being.
Since then, the scale of money funds has increased year by year. By the end of 2012, the number of money funds in the whole market reached 95, with a total size of 707.5 billion yuan, accounting for more than 25% of the total market size of funds.
Although the growth momentum is very strong, compared with the 40% proportion of stock funds at that time, currency funds are still unmatched. The real catfish arrived in 2013, and the launch of Tianhong Yu’ebao began to challenge the territory laid by some industry big brothers in the past 10 years.
Tianhong’s Yu’e Bao, which was established at the end of May 2013, had climbed to 185.3 billion yuan by the end of 2013. Since then, with the adjustment of the A-share market in 2016, the scale of Yu’e Bao reached 11,000 in March 2017. billion.
It is worth mentioning that the transaction value of Tmall’s “Double 11” event exceeded 100 billion yuan in 2016 and exceeded 160 billion yuan in 2017. Due to the payment function of Yu’ebao, the issue of its liquidity at that time has also become the focus of everyone’s attention many times.
An industry insider also said: “In the early days of Tianhong’s Yu’e Bao, we overcame many difficulties. For example, during Double 11, there was a lot of pressure on the backstage, but it went through smoothly.”
In just one year, the scale of Tianhong Yu’ebao continued to climb to 1.7 trillion yuan in 2018, and the proportion of money funds in the total market fund scale reached a new height in August 2018, accounting for more than 63%. .
The eye-catching performance of Tianhong’s Yu’ebao has made various fund companies envious, and they have launched various baby products one after another. Major banks, securities companies, and Internet channels have grafted money funds, making the overall scale of money funds continuously exceeded 30,000. billion, 5 trillion, etc., and has now exceeded 10 trillion yuan.
There has been no new money base issued in the past 4 years
In the past 20 years, monetary funds have experienced rapid expansion and barbaric growth. Of course, they also encountered many problems.
Early money funds have not yet clearly defined the investment scope and investment period, so period mismatch is also common. In August 2004, the “Interim Regulations on the Management of Money Market Funds” was released, which stipulated that the average remaining period of the money market fund investment portfolio should not exceed 180 days.
In October 2017, the “Regulations on Liquidity Risk Management of Publicly Offered Open-end Securities Investment Funds” stipulated that when the top 10 holders of monetary funds hold more than 50% of the shares, the average remaining period of the investment portfolio shall not exceed 60 days, and the average remaining period shall not exceed 60 days. The duration shall not exceed 120 days.
In addition, currency funds have been used by fund companies as an artifact for scale redemption for a long time. At the end of each quarter, half-year, and year, a group of money funds swarmed, and at the beginning of the quarter and the beginning of the year, another They all quit.
Another major challenge for money funds is liquidity management. For money funds that can be redeemed and realised at any time, liquidity is undoubtedly one of the souls of the product. The main liquidity test occurred in two years. In the first half of 2013, there was a short-term liquidity shortage in the market, and the size of the money fund decreased by 346.7 billion yuan, a drop of 49%.
At the end of 2016, currency funds encountered large redemptions. At that time, it was reported that there was a crisis of liquidation of currency funds of fund companies due to forced redemptions. Later, it was found from the fourth quarterly report of 2016 that the size of currency funds decreased in the fourth quarter of 2016. More than 200 billion yuan, and some fund companies even experienced net redemptions of more than 120 billion yuan.
That is to say, from the beginning of this crisis, the supervision began to pay more attention to the concentration risk of a single platform, and also brewed the industry-wide reform of the money fund. In 2017, the money fund no longer participated in the ranking, and it became a thing of the past to rely on the size of the money fund to impact the scale list.
The real change started in 2018. In 2018, there was not a new currency fund issued in the whole market. At the same time, Tianhong Yu’e Bao was no longer the only one. Access to the monetary fund products of Bosera and China Europe funds, and now more than 20 funds have been introduced, which has become a monetary fund platform shared by many fund companies.
In 2018, there will be another major change in monetary funds. The “Guiding Opinions on Further Regulating Internet Sales and Redemption Related Services of Money Market Funds” points out that a single monetary fund held by a single investor in a single sales channel will be “T” on a single natural day. +0 Redemption and withdrawal business “The withdrawal amount cannot exceed 10,000 yuan.
In addition, in order to break everyone’s inherent concept of money funds that only make money without losing money, in 2019, money funds began to innovate in floating NAV products, and a total of 6 new money funds were issued that year. In August 2019, the first net worth floating money fund, Harvest Rongxiang floating net worth fund, was established.
However, since 2020, no new currency fund has been issued again. That is to say, there has been no new currency fund issued for nearly 3 years. If 2018 is counted, there have been no new currency funds for nearly 4 years. Newly issued currency funds.
Although no new currency funds have been issued for many years, from the perspective of other low-risk products, whether it is the previous capital-guaranteed funds, new funds, or the now prosperous inter-bank certificates of deposit funds, short-term debt funds, etc. form an alternative shock.
In Wei Zhen’s view, “As a public offering with a scale of about 10 trillion yuan, money market funds have good liquidity, higher returns than demand deposits, and a stable investor structure. They undertake the responsibility of actively serving the wealth management needs of investors. In the future, the overall development will continue to be stable and healthy.”
The above-mentioned monetary fund manager also pointed out: “As a cash management product, monetary funds still have unique advantages such as convenience, direct consumption, and T+0 rapid redemption. From this point of view, although the yield has declined, but Monetary funds are difficult to replace.”
28 100 billion-level senior “players”
In the 10 trillion currency market, there are many fund companies that benefit from currency funds. Once upon a time, currency funds were still the artifact of opening, and the first product after the establishment of fund companies, mostly began with currency funds.
But the real senior players in the market have to look at fund companies with a management scale of over 100 billion. Wind data shows that as of the end of June this year, a total of 28 fund companies had a money fund management scale of more than 100 billion.
Among them, there are 4 companies with more than 500 billion yuan, namely Tianhong Fund, GF Fund, CCB Fund and Bosera Fund. Tianhong Fund is undoubtedly a senior player. Tianhong’s Yu’ebao stands out, allowing it to overlook the size of money funds of all fund companies, and it also brings huge returns to it.
In 2017, Tianhong’s Yu’ebao brought over 4 billion yuan in management fee income to Tianhong Fund, while the customer maintenance fee paid to sales agencies was only about 2.03 million yuan. The scale has dropped significantly, but it still contributes more than 2.5 billion yuan in manager compensation.
At the same time, in terms of attracting traffic to the Ant platform, it cannot be measured by simple income. Although it is a currency fund, it also plays a role in the Ant Fund platform’s road to become the largest non-currency management scale. pivotal role.
GF Fund and Bosera Fund are the beneficiaries after the opening of the Yu’ebao platform. At the end of March 2018, the monetary funds of these two fund companies were about 196.8 billion yuan and 203.3 billion yuan. By the end of June this year, the management scale of monetary funds It increased to 595.8 billion yuan and 511.8 billion yuan.
Among them, GF Tianli E, which is connected to the Yu’ebao platform, has grown from 20.4 billion yuan to 109.1 billion yuan, GF Moneybag Currency A has grown from 15.2 billion yuan to 83.2 billion yuan, and Bosera’s cash income currency A has grown from 3.2 billion yuan to 100 million yuan. 152.3 billion yuan, Bosera’s daily profit increase currency A, from 100 million yuan to 40 billion yuan, an increase of 400 times.
What kind of platform is backed by, often brings the most intuitive changes. Outside the Yu’ebao platform, it can be noticed that among the 28 fund companies, many of the top-ranking fund companies are bank-based fund companies. While pushing up the scale of the cargo base, it can often also achieve the drainage of the non-cargo scale.
From these 28 fund companies, it can also be found that basically non-goods “play” well, and the scale of the cargo base is relatively high, but the cargo base “plays” well, and the scale of non-goods does not necessarily go hand in hand.
Tianhong Fund is one of them, but in recent years, with the rise of index products and fixed income products, there have been obvious changes. In addition, CCB Fund has a relatively large scale contrast. As of the end of June, the management scale of CCB Fund’s public funds was about 714 billion yuan, but the management scale of currency funds reached 514.6 billion yuan.
Product net worth or future trend
Now, when the monetary fund has reached the scale of 10 trillion, the industry pattern has been clearly differentiated. It is more and more difficult for latecomers to catch up. Coupled with stricter supervision, the maturity of monetary funds has improved, and fund companies must It is not easy to make another big breakthrough in currency funds.
A currency fund manager with a management scale of over 100 billion said: “As a relatively mature category, currency funds will not have many innovations in the future. With more complete supervision, for currency fund managers, the pursuit of higher returns is not the primary goal. , but to pay attention to user experience, pay attention to liquidity risks, create returns that match risks, and pursue beyond performance benchmarks.”
A person from a fund company in South China also pointed out: “As a mature cash management product, currency funds usually have the characteristics of large scale and large number of holders. In other words, the primary task is to improve the risk prevention plans and measures, enhance the anti-risk ability, and improve the stable operation ability of the product, and the requirements for product innovation are not very high.”
Wei Zhen believes: “In terms of innovation, the transformation of product form to net worth is a direction; the investment scope is transformed to certificate of deposit funds, and the field of inclusive finance is promising. The investment management of monetary funds has entered the industry since 2016. The most regulated, rigorous and fair playing field has truly realized the meaning of financial inclusion and liquidity management tools.”
However, there are also views that the continued decline in monetary fund yields is mainly due to the fact that the fund managers have too little room to maneuver. Whether it is restrictions on investment scope, or requirements for holding periods, deviations, etc., monetary fund managers are very It is difficult to make differentiation, and it is difficult to have room for improvement in revenue.
In Wei Zhen’s view, “the manipulative space for fund managers is not getting smaller and smaller, but as the industry develops and matures, the understanding and operation of products are more intensive and meticulous, from macro and policy trends, from currency The shape of the market curve is excessive, the rhythm is determined from the changes in liabilities of different types of goods-based products, and the operability of fund managers extends from the asset field to the combination of liability management, which is a systematic improvement of comprehensive capabilities. set limits.”
Reporter’s Notes | Questions and Answers by “Big Coffee” Fund Managers
Yu’e Bao is a monetary fund that is very close to our lives. Many people know that funds may start from Yu’e Bao.
Maybe everyone can clearly feel that from holding Yu’e Bao to the present, the income every time they open it seems to be worse than the other day.
What is the reason behind this? What are the better options? This may be a topic of great concern to everyone.
The reporter interviewed a number of “big coffee” fund managers on the Yu’ebao platform to answer questions about everyone’s concerns.
Of course, Yu’e Bao is only a representative work of the changes in the industry in the past 20 years. The monetary fund has developed to this year and has a scale of 10 trillion. There are many stories behind it that you may not know very well.
Since the liquidity crisis in 2016, the currency fund has also entered the industry reform, and has not issued new products for many years. How can it develop in the future, and what can be innovated, these will also be directly related. with you and my wallet.