Just four years ago, Alibaba’s payment affiliate Ant Financial saw an opening in the piles of cash held in their customer’s online payment accounts. The company took a page from the playbook of US and UK brokers of the 1990’s and put the cash into a fund, dubbed Yu’e Bao.
The fund has now surpassed JPMorgan’s US government money market fund, which has US$150 billion, to become the world’s largest, reports the Financial Times.
Peter Alexander of China consultancy Z-Ben Advisors says the fund has proved so attractive that many customers are pulling money out of bank accounts to put in their Alipay wallets.
Other Chinese players have also entered the market with Tencent’s wealth management platform Licaitong partnering with banks to offer money market funds.