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HEAD-TO-HEAD: Tianhong vs JP Morgan
FSA compares the world’s two largest money market funds: Tianhong’s Yuebao and JP Morgan’s US government fund.
The yields of both funds for the period Jan 2016-Oct 2017, according to Fitch Ratings
Yuebao is denominated in RMB and the JPM fund is denominated in US dollars.
The yield for the Yuebao is significantly higher than the JP Morgan fund, although both are seeing increasing yields.
In October 2017, Yuebao was yielding around 4% while the JPM vehicle yielded 1%.
According to Fitch, bond yields are, in general, structurally higher in China than in the US because of China’s underlying economic growth and central bank rates.
Meanwhile, US money market fund yields have also been increasing as the US Fed has been raising interest rates.
In terms of fees, Yuebao’s are higher compared to JPM, according to Li.
The Yuebao fund’s management fee is 0.3%. It addition, it has a custodian fee of 0.08% and a distribution service fee of 0.25%, she added.
The JPM fund has a management fee of .03%, with a cap on expenses of 0.18%.
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