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China’s Top Stock Funds Trashed by $111 Billion Moutai Wipeout

  • Crowded trade is reversing due to policy tightening concerns
  • Buying Moutai had been the most effective way to top rankings
Baijiu Production Inside China's Biggest Distiller Kweichow Moutai Co.
Photographer: Qilai Shen/Bloomberg
Updated on

The most popular stock trade in China is unraveling, tarnishing the reputations of some of the country’s most successful money managers and undermining the outlook for the world’s second-largest equity market.

Until three weeks ago, buying the nation’s beloved liquor maker Kweichow Moutai Co. was a surefire way for the $3 trillion mutual fund industry to mint money and attract bumper inflows. The stock soared 30% year-to-date through its Feb. 10 record, after gaining almost 70% in 2020 -- and doubling in the year before that.