AI stock volatility hits Chinese quant funds
teortaxesTex · x · 2026-07-20
AI-related stocks have turned into a painful trade for Chinese quant funds.
The post quotes Bloomberg on how a recent selloff deepened drawdowns for local hedge funds, with one manager saying the environment was extreme. The highlighted article says Chinese quants’ average excess return has shrunk to 3.5%, down more than 10 percentage points from a year earlier, as AI-stock volatility made it harder for diversified portfolios to beat the market.
It also notes that:
- CSI 1000 small-cap stocks fell more than 12% last week, the sharpest drop since February 2024.
- The benchmark CSI 300 rose even as small caps sold off.
- High-Flyer’s CSI 1000 Quant Multi-Strategy No. 1 had outperformed the benchmark by an annualized 24 percentage points since inception before the latest plunge.
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