Recently, Yu'e Bao celebrated its 10th anniversary of launch, sparking a wave of online sales of Yu'e Bao's 10-year earnings. As a former national wealth management tool, the popularity of Yu'ebao has to some extent accelerated the popularization and development of monetary funds in China. Nowadays, the total scale of China's monetary fund is nearly 12 trillion yuan, which has become an important tool for people's cash management. Why did monetary funds rise rapidly? In recent years, with declining returns, are monetary funds still attractive? Where is the future development space? Lower the financial threshold In June 2013, Yu'e Bao service was launched on Alipay APP, and monetary funds began to enter the vision of the people. In fact, before the birth of Yu'ebao, monetary funds had existed in China for many years, but due to the high subscription threshold and low penetration rate, it was difficult for ordinary people to access them. The currency fund model pioneered by Yu'ebao, which starts at 1 yuan and can be redeemed at any time, greatly reduces the financial threshold for ordinary people. Under the influence of multiple factors such as the continuous volatility of the stock market and the shortage of market funds at that time, the yield of monetary funds investing in short-term monetary instruments soared. The 7-day annualized yield of Yu'ebao was once as high as 6.76%, even exceeding the yield of most bank wealth management products during the same period. Monetary funds instantly became the "hot cakes" in the market at that time, and the market size accelerated to expand. After seeing market opportunities, in the following years, major internet platforms and commercial banks launched "baby" money fund products, further promoting the vigorous development of China's money fund industry. According to data from the China Association for International Monetary Funds, as of the end of May 2023, the size of domestic monetary funds has increased from over 300 billion yuan at the end of June 2013 to 11.9 trillion yuan, making it the largest type of public fund product with the largest increase in scale compared to the previous month. The number of existing monetary funds has reached 372. In the view of insiders, with the rapid development of China's public funds industry, monetary funds, as Financial inclusion products of cash management, have become an important type of public funds and actively serve the wealth management of residents by virtue of high security, good liquidity, low investment costs and other characteristics. Sun Guiping, senior analyst of Shanghai Securities Fund Evaluation and Research Center, believes that there are three main reasons for the rapid rise of monetary funds: first, the income is relatively high. As a cash management tool, monetary funds' income is significantly higher than that of Demand deposit. Although the yield of monetary funds has declined in the later period, the characteristics of convenient redemption and strong liquidity still make them attractive. The second is stable returns with small pullbacks, and losses may only occur in extreme cases. Because monetary funds mainly use the amortized cost method for fund valuation, changes in bond prices cannot be reflected in fund returns, and the duration of fixed income assets held is short, which is less affected by the bond market. Thirdly, it can serve as a "reservoir of funds". In the absence of a better investment direction in the capital market, monetary funds have become a better destination for idle funds. Risk control and supervision are becoming stricter. With the rapid growth of the scale of monetary funds, regulatory authorities are continuously strengthening their regulatory requirements for monetary funds. In August 2017, the CSRC issued the Regulations on the Management of Liquidity risk of Open ended Investment fund in Public Offering to manage the liquidity and scale of monetary funds