What is yu'ebao's initiative to lower the ceiling? Generally speaking, financial companies want customers to invest more money in their own companies. However, Tianhong fund took the initiative to reduce the upper limit of investors' investment in yu'ebao, so that users would not put large amount of funds into yu'ebao. What's the reason for this?
Tianhong fund reduces the upper limit of individual investment of yu'ebao investors
In the afternoon of May 26, Tianhong Fund announced that the maximum amount of yu'ebao held by individuals was adjusted to 250000 yuan from 0:00 on May 27. The announcement also shows that yu'ebao's existing stock, transfer out and other service functions are not affected.
Tianhong Fund said that the adjustment is to make yu'ebao more in line with the positioning of being a personal small cash management tool. This adjustment has no impact on the vast majority of users of yu'ebao, and the users who have previously placed more than 250000 funds in yu'ebao do not need to withdraw after the adjustment, so they can continue to enjoy the benefits.
According to the quarterly report released by Tianhong fund on April 22, yu'ebao's entrusted capital has exceeded 1.14 trillion, becoming the world's largest Monetary Fund.
According to yu'ebao's 2016 annual report, the number of fund holders reached 325 million, including 99.72% of individual investors and 0.28% of institutional investors.
For what reason?
Tianhong fund's move seems to have some meaning of not making money. Why are large amounts of funds excluded? There may be the following main considerations.
Reduce run risk
The most direct consideration is to reduce the difficulty of liquidity management and prevent run risk. Yu'ebao receives investors' funds at the capital end. The funds are t + 0 and can be redeemed at any time. At the asset end, the funds are linked to monetary funds and invested in treasury bonds, central bank bills, commercial bills, bank certificates of deposit, short-term government bonds, high credit enterprise bonds, interbank deposits and other short-term securities. The products at the asset end are always t + 1, but they can be t + 0 at the user end, depending on the inflow and outflow of funds, the subscription funds and redemption funds can be offset, and the insufficient part can also be advanced. Through data analysis, we can predict the purchase and redemption behavior to a certain extent, so as to carry out more accurate liquidity management.
When the investment amount of single investor is too large, the liquidity management becomes more difficult. At present, the average investment amount of each user is 3800 yuan. If an investor with an investment amount of millions wants to redeem, it needs to match a large number of subscribers' funds to meet their redemption needs, so liquidity management is very difficult. Lowering the investment ceiling of investors can reduce the difficulty of liquidity management.
As early as 2014, the central bank stated in the China financial stability report (2014) that money market funds have the risk of similar deposit runs, so it is necessary to strengthen the coordination of financial supervision to prevent potential systemic risks. The central bank said the problems caused by its rapid development, such as deposit diversion, financial market volatility and insufficient supervision, also deserve close attention. There are potential risks such as insufficient disclosure of investors' risk returns and payment security. With the support of T + 0 redemption and bank based fast transfer, the "baby" type of savings has greatly enhanced, which has an impact on the bank's short-term savings. In addition, 'Baobao' has the risk of similar deposit run, and the multi-level systematic risk prevention and rescue mechanism still needs to be improved. In extreme market conditions, there may be a large number of redemptions, forming an impact on the financial market and other financial institutions.
Cooperate with the reduction of balance sheet and reduce the capital idling
Preventing run risk is one thing to consider, but it should not be the only reason. When the income level of yu'ebao had declined before, users had more reasons to redeem, but yu'ebao also did not reduce the investment ceiling. At present, the interest rate level is getting higher and higher, which has reached 4%, and its attraction to users is increasing. On the contrary, at this time, the investment ceiling is lowered. There should be more than just measures to strengthen liquidity management.
What yu'ebao really needs to do is to adapt to the supervision of the regulatory authorities and keep pace with them. Since 2017, the central bank has been promoting the reduction of scale and leverage, recovering excess liquidity in the economic system, preventing further expansion of asset bubbles and preventing systemic financial risks. An important step is to recover the liquidity in the banking system. The final flow of yu'ebao funds used to be bank deposits, but now it is mainly the inter-bank deposit receipts of joint-stock banks and city commercial banks. In fact, these banks have helped small and medium-sized banks to expand their scale by issuing inter-bank certificates of deposit to enhance their debt capacity, and then releasing funds through asset management, lending and other forms.
In addition, it may also reduce the need for capital idling in the financial system. The user's funds are invested in yu'ebao, the funds of yu'ebao flow to the interbank deposit receipt, the funds of the interbank deposit receipt flow to the asset management and other products, and the final process of entering the real economy is long, or even may not flow to the real economy. This is not the same as directly buying Treasury bonds and other products.
Yu'e Bao takes the initiative to reduce the investment ceiling, which can also be seen as a move in line with macro management policies.
It's good for me
In addition, reducing the investment limit of the balance treasure will also benefit Alipay and Celestica fund. Yu'ebao has become the largest single fund in the world with a growing scale. The difficulty and pressure of asset allocation are increasing. Appropriately reducing the scale can reduce the difficulty of management.
Moreover, yu'ebao is no longer a strategic product for ant financial services or Tianhong fund, or its strategic mission has been completed. Through yu'ebao, a large number of users have been attracted, and to a certain extent, the financial management awareness of the Internet users has been aroused. For ant financial services and Tianhong fund, yu'ebao is an entry-level product provided to users, both of which want users to experience more of their products, rather than just focusing on yu'ebao.
According to some data, at present, the management fee of monetary fund is 0.33%, that of bond fund is about 0.65%, and that of stock fund is between 1% and 1.6%. Ant financial services and Tianhong fund certainly hope investors to invest in bond funds, stock funds, hybrid funds and other products.