Alibaba's Yu'ebao has become one of China's largest monetary funds, becoming more popular than stocks among investors in Shanghai and Shenzhen, forcing authorities to seek ways to appeal to investors to put their money back into the country's stock exchanges, reports the Chinese-language Beijing Times.

According to investment fund Tianhong Asset Management, the number of Yu'ebao investors has reached 81 million as of Feb. 26 this year. The number is far greater than both the Shanghai and Shenzhen stock exchanges, with a combined 67 million shareholders.

Yu'ebao's overwhelming popularity has alerted the stock market as well as the China Securities Regulatory Commission. Commission chairman Xiao Gang said the fund's high rate of return has affected liquidity in the stock market.

The fund's 6% return rate is not particularly high compared to the interest rate offered by banks for savings accounts, which are around 4.75% after five years, according to Chinese-language information sharing website Bajiu. However. its popularity suggests that investors are shunning high-risk stocks and turning to the online fund as it offers relatively lower risks, the paper said. The stocks' low return rate is also an important factor.

During a work conference earlier this year, the Shanghai Stock Exchange proposed measures to strengthen its trade of blue chip stocks. It also suggested that listed companies distribute dividends in cash and that Beijing should consider revoking dividend tax. Currently, listed companies are taxed heavily if they distribute more cash dividends.