China macro hedge funds weather July selloff as quants take heavy losses
China’s macro hedge funds, including Bridgewater Associates’ China business, proved more resilient than many of the country’s quantitative strategies during July’s sharp equity market selloff, according to a report by Bloomberg.
China's macro hedge funds displayed greater resilience than many quantitative strategies during July's equity market decline, according to a Bloomberg report. Despite significant losses, several multi-asset managers maintained positive annual returns. Bridgewater Associates, managing over RMB60bn ($8.9bn) in China, saw its All Weather Plus strategy decline 2.8% in July but remained up about 3% for the year.
Other macro managers, such as Wenjing Capital Management and Xiaohongzhang, also absorbed losses while preserving their gains for the year. The relative stability of macro strategies underscores their appeal in navigating significant shifts in risk appetite. China's quant industry, valued at RMB2.6tn yuan ($385bn) this year, suffered substantial July losses, with long-only strategies averaging a 17% decline.
Eight of nine funds managed by DeepSeek founder Liang Wenfeng also recorded negative annual returns. However, the overall performance of Chinese hedge funds across all strategies averaged a 7.3% loss in July, slightly less than the 7.9% decline in the CSI 300 Index. Bridgewater's China All Weather Plus strategy, employing a risk-parity approach, cushioned the fund against sharp equity movements by diversifying across various asset classes.
The fund generated gains from bonds amid market turbulence and recorded an annualized return of 26.3% since its launch in July 2023. Bridgewater's discretionary team also contributed to the fund's positive performance.
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