China Quants Making Big Cap Bets Weather Stock Turmoil
- Funds trading small caps bear brunt of losses in selloff
- China reins in quants to bolster stocks after three-year drop
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A group of systematic investors betting on large Chinese companies has emerged largely unscathed from this year’s “quant quake” that’s sparked turmoil in the stock market and a crackdown by regulators.
Rules-based funds investing in large stocks have weathered the equity storm as blue-chip companies outperformed on haven demand and buying by state funds. In one lens into the opaque world of quantitative trading, a Bloomberg-compiled portfolio that makes long and short bets on Chinese large caps has gained about 11% this year through Thursday, after posting the best month since 2014 in January.