Computer-driven hedge funds are betting that China’s financial markets offer plenty of opportunities to make money, despite an exodus of foreign investors, rising US-China tensions and growing scrutiny by regulators.China’s CSI 300 index stock index has fallen nearly 9 per cent this year, compared with a 19 per cent rise in the US S&P 500, amid concerns about Beijing’s lack of forceful policy support in response to a crisis in the property sector. Much of the foreign money that flowed into Chinese equities earlier this year has now left.
Nevertheless, some European quantitative funds are being drawn to China, eager to unleash their complex trading algorithms on markets that often do not move in line with the US.
London-based hedge fund firm Aspect, which manages roughly $8bn in assets, is setting up an office in Shanghai, according to a person with knowledge of the matter. It has already obtained a qualified foreign investor licence, which gives it access to additional Chinese futures contracts. The firm declined to comment.