ETFs & Funds
Home›ETFs & Funds›Fund Industry›China macro hedge funds held up better than quant stra…
China macro hedge funds held up better than quant strategies in July selloff
Bridgewater’s China All Weather Plus strategy fell 2.8% before fees in July, but stayed up about 3% for the year through July 31.
China macro hedge funds showed relative resilience during July’s sharp equity market selloff, with several multi-asset managers maintaining positive returns for the year even after suffering losses last month, according to a report by Bloomberg as cited by Hedgeweek.
Bridgewater Associates, which manages more than RMB60bn, saw its local All Weather Plus strategy drop 2.8% before fees in July, but it remained up about 3% for the year through July 31. Wenjing Capital Management’s strategy was up 12% for the year after falling 4.4% in July, while a Xiaohongzhang fund managed by Hangzhou BoLiErXiang Asset Management was still ahead 10.6% year to date after a 1% monthly decline.
Hedgeweek said the contrast highlights why macro strategies that spread exposure across equities, bonds, commodities and other asset classes can be more defensive when risk appetite reverses sharply. The article noted that China’s equity selloff was especially difficult for quantitative strategies, with long-only quant strategies recording an average 17% loss in July, while data from PaiPaiWang showed 309 macro hedge funds tracked by the firm lost an average 3.5% in July.
The performance gap also came as quant assets had expanded rapidly during an earlier market rally, with the quant industry reaching about RMB2.6tn in assets this year, Hedgeweek reported. It added that Bridgewater’s risk-parity approach allocates across multiple asset classes rather than concentrating risk in one market, aiming to cushion sharp moves in any one as market stress rises.