Annualized yield enters the "era of 1" - money market funds seek a way out

The latest data from the China Securities Investment Fund Industry Association shows that as of the end of May 2025, the total size of the money market funds has surpassed 14 trillion yuan for the first time. However, in sharp contrast, as the largest category in the current public offering fund market, the average 7-day annualized yield of money market funds has dropped to 1.2%, with the annualized yield of quite a few products already falling below 1%. Money market funds have experienced a period of rapid growth, attracting a massive amount of funds due to their convenience and relatively high returns. However, times have changed, and with the evolution of the market ecology and regulatory environment, money market funds have already lost their luster. Some even believe that today's money market funds are in a dilemma of being "tasteless to eat but a pity to discard", as on one hand, the yields continue to decline, and on the other hand, they are difficult to be completely replaced due to their unique liquidity and safety features.