A Chronicle of a U.S. Dollar Money Market Fund Product’s “Crash”
In the past few years, in the minds of mainland financial investors, the "high interest rates" across the ocean have always seemed like a tempting fertile land.
Some investors, yearning for "stable high interest," have set their sights on the overseas fixed-income markets that seem safe. "Accessing" these markets through securities asset management products to directly or indirectly invest in overseas money market funds (USD denominated) appears to be one of the few "bridges" to the other side, available only to a select group of high-net-worth individuals.
However, this seemingly "foolproof" strategy has recently "capsized."
Industry information reveals that some USD money market fund-related products have suffered significant "losses" over the past year: previously stable, high returns have suddenly turned into pronounced negative yields. Investors and channels have been shocked by these unexpected outcomes...
USD Money Market Funds See Negative Returns
Recently, on a well-known internet wealth-management platform, an asset management product called "Guozheng Anyue USD Money Series" (hereafter "Guozheng USD Product") posted an astonishing performance.
Reportedly, the product started operating in April 2025. But as of May 6, 2026, its one-year return rate was a shocking -2.49%! Since inception, the return rate has been -3.59%, with the latest net asset value at 0.9641.
Classified as a High-End Product
According to the product information page, the lock-in period is 6 months, with a minimum purchase amount of 500,000 RMB, targeting high-net-worth investors specifically.
Moreover, from the net asset value chart, the product was relatively stable early on, but then gradually declined, especially after October 2025, with accelerated decline in net value.
According to the product page, this is a "USD money and short-term bond strategy" product—part of the "cross-market investment" and "overseas allocation" portfolios.
The product is managed by Guozheng Asset Management, a subsidiary of a securities firm.
Product Page Promises Not Fulfilled
Despite the losses, the product page still highlights "three major features."
Specifically, the features include:
"Mainly invests in USD money market funds," "endeavors to create a low-volatility holding experience for investors," etc.
Additionally, the product states, "Investors do not need to exchange currencies and do not consume forex quotas." As the outcome revealed, this sweet arrangement may have contributed to the current loss situation.
Overseas Money Funds Are Not Losing Money
Interestingly, if you look at the overseas money market fund market, related funds' returns remain relatively stable—in other words, most overseas USD money market funds were profitable over the past year.
For example, a USD money market fund under a major overseas mutual fund company reported a one-year return of 3.71% as of April 30, 2026—7 percentage points higher than the aforementioned domestic securities asset management product.
In other words, the Guozheng USD product suffered principal losses even as overseas USD money market funds generally yielded profits. The reasons behind this are certainly intriguing.
This phenomenon of "holding money market allocations but ending up with negative returns" also disrupts holders’ usual perception of "fixed income" for USD cash management products.
The "Devil" Is in the Details
If the underlying assets are generally "profitable," why is this asset management product losing money?
The answer can be found on its strategy page.
On this page, the investment strategy looks flawless: prominently noting "US deposit rates remain high," and citing data showing the Fed rate stays between 4.25%–4.50%.
The strategy also emphasizes the large "interest rate differential between China and the US," highlighting that domestic savings rates around 1.10% are clearly lower than overseas USD savings rates.
But a key factor is quietly hidden in small grey text on the page.
In the data-source footnote, there’s a line of light-grey text:
"Actual investment needs to consider the following factors: exchange rate fluctuations, adjustments in forex policy, changes in liquidity environment, currency conversion costs, tax costs, etc."
The "Core Reason" for Net Value Drawdown
The reason for the losses is precisely what that grey text refers to: exchange rates.
Previously, some fund managers for relevant USD money market products mentioned in their reviews:
Because the RMB ran a strong independent trend in Q1, the USD/RMB rate fell directly from 7.0 to about 6.8. The appreciation of the RMB against the USD eroded the underlying returns, causing the product’s net asset value to fall 0.49% in Q1.
This statement is the direct "verdict": Even if the underlying USD fund earned interest, it could not offset the loss from RMB appreciation against the USD.
This product meant to provide "low volatility holding experience" instead exposed investors to high volatility currency risk—a major regret for such products.
Exchange Rate Trend Fully Confirms Outcome
Looking back at the product’s design and timing, it seems almost "destined."
First, noteworthy is that the product was launched (around April 2025) at a stage high in the USD/RMB exchange rate (around 7.35:1).
Afterwards, the rate steadily dropped, bottoming at 6.80. Not considering interest and conversion fees, buying USD at 7.35 and selling at 6.80 would result in about a 7.5% loss.
In just over a year, forex exchange rate fluctuations reached 7%–8%, enough to wipe out any stable fixed income product’s returns.
Exchange Rate Is the "Double-Edged Sword" for Cross-Border Products
The case above reveals a cognitive trap for many investors in cross-border asset allocation: It seemed one bought high-yield, low-risk overseas assets, but due to lapses in currency risk management, was actually wholly exposed to FX risk.
For example, similar RMB-subscription QDII money market funds have the same feature. Their essence is a composite of "exchange rate gains" + "overseas money fund returns."
When investors transact solely in RMB, without currency conversion, it’s easy to miss that such funds are very different from RMB money market funds, misleadingly thinking risks are alike. In fact, the difference is huge.
Such products should not claim to "seek low volatility investment experience"; quite the opposite, they should prominently highlight "exchange rate risk" exposure.
If investors use such products as the base for cross-border allocation, they can’t necessarily fully hedge asset volatility—or more accurately, such products’ volatility largely depends on currency stability.
This case is a reminder: Cross-border products are double-edged swords; if you don’t understand their underlying logic or FX impacts, so-called "asset allocation" may just mean "stacked risk."
Risk warning and disclaimerThe market carries risk; investment requires caution. This article does not constitute personal investment advice, nor does it consider individual users' specific investment goals, financial circumstances, or needs. Users should consider whether any opinions, viewpoints, or conclusions in this article suit their particular situation. If investing based on this, you do so at your own risk.