The persistent shortage of money has brought great impact to China's money market. Due to the exaggeration of media reports, investors have a relatively panic mood. In addition, with the promotion of bank deposits at the end of half a year, a large number of money market funds were redeemed, which led to rumors that money market funds could not repay their investments. But none of these rumors have come true.
Therefore, this round of capital shortage led to a large number of redemptions, which is the main reason for the decline in the yield of money funds. How to understand it? Take Tianye Li Tiande Monetary Fund, the first monetary fund with negative deviation exceeding 0.5% this year, as an example. Originally, under normal circumstances, the Foundation kept 5% of its cash to cope with the usual payment pressure, and other funds were invested in the bond market, mainly corporate bonds, short-term financing bills, central bank bills and bank deposits. But recently, due to a large number of investors to redeem the fund, the fund had to sell a large number of money funds in its hands and prepare a large amount of cash to cope with the redemption pressure. After the proportion of cash in the fund's total assets is greatly increased, it will naturally lead to a decline in the fund's rate of return.
In addition, many other money funds are also facing this situation. When many funds sell bonds in the short term, many bonds with relatively long maturities will face downward pressure. Although the yield of some varieties such as bond repurchase held by the fund has increased, it may not be enough to offset the impact of the decline in bond prices with a long term. Therefore, the yield of money funds has generally declined recently.
From the above analysis, it can be seen that the bond portfolio and the redemption pressure faced by bonds are important reasons for the recent performance differentiation of money funds.
However, the situation described in your question itself is far from the truth. What you said is a day's situation, which can't reflect the whole picture of the facts at all. The actual situation is: from June 7 to now, Huaxia cash has a fluctuation range of 3.5%-4.59%, which is a good performance in the same period. The income of Huitianfu Express Line A was very low in April and May, basically below 3%, but the yield increased in June. The latest yield reached 4.55%, but it was not higher than the highest yield of 4.59% of Huaxia Cash on June 17.
As far as the latest rate of return is concerned, both funds are actually 0.33% (non-annualized rate of return), so they are neck and neck. The recent increase in Huitianfu's yield may be due to the low redemption pressure it faces on the one hand and the high proportion of short-term bonds in its portfolio on the other.