CHINA’S fast-growing online investment fund Yu’e Bao nearly tripled in size during the first quarter, as its funds under management rose to 541.28 billion yuan (US$87 billion).

    Yu’e Bao, or leftover treasure, was launched by China’s e-commerce giant Alibaba Group Holding Ltd. in June last year, in cooperation with a then small fund management firm, Tianhong Asset Management.

    The fund has become wildly popular with tech-savvy Chinese, offering higher returns than traditional bank deposits and posing a significant challenge to the nation’s banking system, where interest rates are largely State-controlled.

    The success of Yu’e Bao has made Tianhong one of the world’s biggest fund management companies and its rapid growth has led to the emergence of a number of domestic copycat competitors, including Tencent Holdings Ltd. and Baidu Inc., which have both launched their own products similar to Yu’e Bao.

    Tianhong didn’t announce a return on investments for the first quarter, but it recently advertised an annualized yield of 5.25 percent. Banks offer 3.3 percent for a one-year fixed deposit and 0.35 percent on savings deposits.

    In the first quarter, Yu’e Bao recorded a total profit of 5.71 billion yuan, according to a financial report by Tianhong.

    Total new investments over the period reached 929.78 billion yuan while sales stood at 573.85 billion yuan. (SD-Agencies)