Core Insights - Tianhong Yu'ebao Money Market Fund has announced a reduction in its custody fee from 0.08% to 0.07%, resulting in a decrease in the overall fee rate from 0.63% to 0.62% [1][4] - This fee reduction is part of a broader trend in the industry, with over 40 money market funds lowering fees this year, driven by a combination of declining yields and regulatory encouragement [1][4][9] Fee Reduction Details - The adjustment in Tianhong Yu'ebao's custody fee is effective from September 23, following discussions with the custodian, CITIC Bank [2][4] - Other funds, such as E Fund and Guoxin Guozheng, have also announced fee reductions, with some management fees dropping significantly [8][9] Market Context - The seven-day annualized yield of Tianhong Yu'ebao has reached a historical low of 1.0200% as of September 22, 2023, reflecting a downward trend in yields across the market [7][10] - The average seven-day annualized yield for all money market funds is currently at 1.12%, with a notable number of funds yielding below 1% [10] Regulatory Influence - Regulatory bodies are pushing for fee reductions in large-scale index and money market funds, which is expected to lead to further adjustments in management and custody fees [4][11] - The China Securities Regulatory Commission has proposed lowering the sales service fee for money market funds, indicating a trend towards reduced costs for investors [4][11] Future Yield Outlook - The current monetary policy is expected to remain accommodative, limiting the potential for significant increases in money market fund yields in the near term [11] - Future yield movements will likely depend on central bank actions regarding key policy rates, with limited room for downward adjustments in short-term asset yields [11]

Group 1 - Multiple money market funds have announced fee reductions to lower investment costs for investors [3] - E Fund has reduced the management fee from 0.20% to 0.15% and the custody fee from 0.08% to 0.05% for its money market fund starting September 26 [3] - Guoxin Guozheng has adjusted its management fee from 0.30% to 0.20% and custody fee from 0.10% to 0.07% effective September 23 [3] - Huabao Fund is offering a promotional service fee reduction from 0.25% to 0.20% for its cash management fund from September 23 to December 23 [3] Group 2 - The average 7-day annualized yield of 358 money market funds is 1.12%, with 22% of funds yielding below 1% [4] - Funds with yields below 1% are primarily those with assets under 10 billion, but there are also 21 funds exceeding 10 billion in this category [4] - The demand for cash management is shifting towards low-risk and flexible options due to declining deposit rates and increased market volatility [4] - Money market funds remain a key choice for cash management due to their low risk, high liquidity, and convenience [4]

Core Viewpoint - Recent trends indicate a significant reduction in fees for money market funds driven by both market conditions and regulatory changes, with the average annualized yield approaching 1% [1][2][4] Group 1: Market Trends - Money market fund yields have been declining consistently over the past year, with an average 7-day annualized yield of 1.09% as of September 11, 2023, and 78 funds falling below 1% [2] - The decline in yields is primarily due to pressure on the underlying assets of money market funds, which mainly invest in bank deposits, bonds, and repurchase agreements, as overall market interest rates decrease [2] - As the equity market recovers, some funds are flowing out of money market funds into higher-yielding products, leading to increased interest in "fixed income plus" products [2] Group 2: Fee Reductions - The impact of fund fees on money market fund yields has become more pronounced as yields approach 1%, prompting fund companies to lower fees [3] - For instance, Tianhong's Yu'ebao fund has a current comprehensive annual fee rate of 0.63%, which includes a management fee of 0.3%, a sales service fee of 0.25%, and a custody fee of 0.08% [3] - Several money market funds have already reduced their sales service fees, with some even lowering them to 0% [3] Group 3: Regulatory Influence - The China Securities Regulatory Commission (CSRC) is actively promoting fee reductions, with a draft regulation capping sales service fees for money market funds at 0.15% per year [4] - The CSRC's earlier action plan aimed at promoting high-quality development of public funds also emphasizes the need to lower costs for fund investors [4] - Industry experts believe that the trend of decreasing fees for money market funds is likely to continue, with potential future developments including the transition to "ecological cash hubs" and the integration of AI for product innovation [4]