The Empire Re-emerges: Baidu Launches Baifa 100 Index Fund

Written by Fiona Zhao || November 07 2014

Baidu Baifa 100 Index Fund, the first big data-based quantitative strategy fund in China, announced that it was closed for new investors only  24 hours of online sale at 15:00 on October 28th.

According to data from Baidu Finance, over RMB 600 million worth of Baifa 100 Index Fund shares were sold through the Baidu Finance Platform. Another RMB1.8 Billion were sold out through Guangfa Fund and Industrial Bank channels. In total, the new fund has raised RMB 2.4 Billion in one day.

The successful launch of the Baidu Internet fund is the result of attractive returns of the index it is based on. The cumulative return on the index has been 560.76% since its launch in 2009. This year, the return was 51.25%. To achieve such return Baidu utilizes its big data capabilities to observe user search behaviour and makes decisions on the collected data. Another reason for successful launch was increased distribution channel: Baidu has extended its qualified customer base through agreements with Guangfa Fund, Huaxia Fund, China Securities Index Corporation, etc. Through this collaboration, sophisticated offline customers of these fund management partners participated in the launch of Baifa 100 Index Fund and became some of the core investors.

Baidu Baifa 100 Index Fund

For a long time, Baidu was playing catch-up when it came to online / internet finance. It seems now that they may have the last laugh in terms of revenue generation anyway. It is a big step forward for the company and a industry-leading financial instrument that might be the first in the world.