In an environment of ample liquidity, money market fund yields are rapidly declining, with returns falling below 1% becoming a common phenomenon. Latest data shows that 87 money market funds across the market have seen their seven-day annualized yields drop below the 1% threshold, reaching historically low levels. Even leading products like Tianhong Yu'ebao now have a seven-day annualized yield of just 1.04%.
Consequently, since December this year, money market funds have issued 134 announcements about forced management fee reductions triggered by contractual clauses due to insufficient yields, with some funds making multiple adjustments.
Over 80 money market funds have seen their yields "break below 1%". According to Tonghuashun data, as of December 24th, 87 money market funds across the market have seen their seven-day annualized yields fall below 1%. Products including Minsheng JYIN Cash Growth Money Fund B, Shanxi Securities Asset Management Daily Add Interest C, GF Cash Treasure A, Jinying Cash Gain E, and Harvest安心 Money Fund A have even seen their seven-day annualized yields drop below 0.5%.
As the largest money market fund by scale in the entire market, Tianhong Yu'ebao also faces yield pressure. Its latest seven-day annualized yield has declined to 1.04%, and on December 4th, it once dropped to 1.001%, approaching the critical "break below 1%" point.
The Tianhong Yu'ebao fund manager previously stated in the third-quarter report that deposit shifts are impacting banks' fund management, increasing liquidity friction and reserve requirements while reducing the money market's base money supply from banks, thereby amplifying money market rate volatility during key periods. The bond and stock markets exhibit a seesaw effect, with bond market adjustments driving interbank certificate of deposit adjustments; although banks face limited liability-side pressure, making interbank CD adjustments relatively slow and limited, overall yields continue declining as existing assets mature.
Zeng Fangfang, public fund product operations at Paipai Wang, indicated that the core logic behind persistently low money market fund yields lies in the dual pressure of systematically declining interest rate centers and abundant market liquidity. On one hand, the central bank maintains a loose monetary policy stance, driving short-end rates continuously lower, causing synchronized declines in yields of underlying assets like interbank CDs, short-term rate bonds, and bank deposits. On the other hand, persistently loose market liquidity intensifies the "asset shortage" phenomenon, forcing money market fund managers to actively shorten portfolio duration and reduce leverage levels to control risk exposure, further suppressing product performance. Additionally, regulatory policies like optimized self-regulatory mechanisms for interbank deposit rates have objectively narrowed money market funds' operational space for yield generation.
However, a small number of money market funds still maintain seven-day annualized yields around 2%. Examples include Yinhua活钱宝 Money Fund D, JPMorgan天添盈 Money Fund B, Jinxin Minfa Money Fund B, and Wanjia Money Fund R.
High-yield money market funds typically employ aggressive duration and leverage strategies. For instance, Wanjia Money Fund mentioned in its third-quarter report that during Q3, with loose liquidity and narrow fluctuations in CD yields maintaining significant spreads over funding costs, the fund consistently maintained high duration while keeping reverse repo asset proportions low, ensuring portfolio returns.
Yinhua活钱宝's Q3 report stated that the fund adheres to the liquidity-first principle, reasonably adjusts portfolio duration, flexibly uses leverage strategies and conducts波段 trades, overall adopting a neutral-to-aggressive approach.
Money market fund scale may continue rising. As money market fund yields keep declining, multiple products have successively triggered management fee reduction mechanisms. Taking Everbright保德信 Sunshine Cash Treasure Money Fund as an example, its contract stipulates that when the seven-day annualized estimated yield calculated with a 0.90% management fee falls below or equals twice the demand deposit rate, the management fee must drop to 0.25% to avoid settlement overdraft risks from sales institutions caused by negative estimated net income per 10,000 units, reverting to the original rate after risk mitigation. The fund triggered this clause to lower fees on December 23rd, but restored the original 0.90% rate the next day after risk elimination, with similar fee adjustments occurring multiple times this month.
Similarly, Yinhe水星 Cash Add Interest also disclosed fee adjustments on December 25th. According to its product contract, when triggering the same yield condition, the management fee drops to 0.30%. This fund also reduced fees on December 23rd and restored the original 0.90% rate on December 24th.
Tonghuashun data shows that since December, money market funds have issued 134 announcements adjusting fund management fee rates due to seven-day annualized yields falling below twice the demand deposit rate. However, approaching year-end, seasonal tightening in market liquidity has pushed money market fund seven-day annualized yields higher, leading to repeated adjustments where management fees are cut and then restored.
In fact, against the backdrop of persistently loose liquidity, money market fund fee reductions have become standard industry practice. On September 23rd, Tianhong Fund announced that Tianhong Yu'ebao Money Market Fund's custody fee would be lowered from 0.08% to 0.07% annually, effective immediately. Notably, this marked Tianhong Yu'ebao's first custody fee reduction in over a decade since its inception.
Tianhong Yu'ebao's fee cut created a significant demonstration effect, prompting multiple fund companies to follow suit with rate adjustments. Everbright Fund simultaneously reduced its product fees, announcing that from September 26th, 2025, Everbright保证金 Yield Money Fund's annual management fee would drop from 0.20% to 0.15%, while the annual custody fee would decrease from 0.08% to 0.05%. Guoxin Guozheng Fund also initiated fee adjustments on September 23rd, 2025, lowering Guoxin Guozheng Cash Growth Money Fund's annual management fee from 0.30% to 0.20% and reducing the annual custody fee from 0.10% to 0.07%.
Despite the downward trend in money market fund yields, against the backdrop of declining deposit returns and volatility in both bond and equity markets, money market fund scale has increased rather than decreased. Data disclosed by the fund industry association at end-November showed that as of end-October, total money market fund shares reached 15.05 trillion, growing by over 38 million shares from end-September. The association's latest November and December data have not yet been released.
However, Wind data shows money market fund shares for October, November, and December 2025 were 14.66 trillion, 14.58 trillion, and 14.63 trillion shares respectively. Money market fund shares slightly declined in November but rebounded in December.
Tan Yiming, chief fixed income analyst at Tianfeng Securities, believes the money market fund scale expansion trend will likely continue in Q4, supported by two main factors: first, some funds may shift to money market funds as high-interest time deposits mature; second, the new fund sales fee regulation (draft for comment) didn't adjust money market fund redemption fees, further highlighting their liquidity advantages and potentially attracting more institutional funds.