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China quant hedge funds suffer sharp losses amid AI selloff
The report links the rout to a reversal in crowded momentum trades as investors moved away from artificial intelligence and semiconductor stocks, driving a sharp turnaround in systematic strategies.
China’s quantitative hedge funds posted significant losses last week after a broad retreat from artificial intelligence and semiconductor stocks triggered a reversal in crowded positions, according to a report cited by Hedgeweek.
The outlet said the drop exposed vulnerabilities in momentum-driven systematic strategies, as losses escalated when previously favored themes fell out of favor.
Hedgeweek reported that the selloff reflected a wider pullback from AI and semiconductor stocks, which led to sharp performance swings for quant funds that were heavily positioned in those trades.