Top China Quant Winds Down Strategy Pummeled by Market Rally
- High-Flyer plans to cut market-neutral positions to zero
- Industry suffered losses in strategy as short bets squeezed
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A top Chinese quantitative hedge fund is shutting down its market-neutral products, exiting a strategy that saw widespread industry losses recently when a surge in local stocks squeezed their short positions.
Zhejiang High-Flyer Asset Management, which manages more than 50 billion yuan ($7 billion), told investors Friday that it would gradually cut all positions in such products to zero, saying future returns will notably fall short of investor expectations, according to a company representative who asked not to be identified discussing private information.