{
  "id": 12032358,
  "title": "Quant funds are ‘necessary’ to China’s ascent as financial powerhouse: investor",
  "url": "https://urgent.news/2026/10/05/quant-funds-are-necessary-to-chinas-ascent-as-financial-powerhouse",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-10-05T00:00:35.000Z",
  "source": {
    "name": "SCMP Business",
    "slug": "scmp-business",
    "url": "https://www.scmp.com/business/banking-finance/article/3369650/quant-funds-are-necessary-chinas-ascent-financial-powerhouse-investor"
  },
  "original_language": "en",
  "account": "Beijing has stepped up its scrutiny of quantitative trading funds, citing concerns over market instability. However, Seth Huang, the head of Aris Capital, remains optimistic about the future of China's quant funds. Huang argues that these funds are \"necessary for a developed economy\" due to their clear advantages over retail investors in China's capital markets. He likens the situation to a \"war with some using machine guns and others butcher knives.\"\n\nThe number of quant funds managing over 10 billion yuan (approximately US$1.5 billion) in assets has surged by 18 this year, according to domestic media reports. This growth is largely attributed to the funds' strong performance. In fact, 95% of CSI 1000 quant index-enhancement funds generated positive excess returns last year, outperforming China's flagship small-cap index by an average of 16.75% and achieving an average return rate of 45.08%.\n\nHowever, quant funds currently face limitations in accessibility for ordinary Chinese investors due to Beijing's strict regulations. While in the U.S., large quant funds manage pension funds and endowments, in China, the government restricts quant funds from managing pensions or state money. This raises questions about the distribution of quant funds' profits.\n\nHuang contends that quant funds have faced criticism for potentially amplifying market swings, but believes they can also provide positive effects, such as cushioning price drops by providing liquidity when retail investors rush to sell. Additionally, Huang highlights the growing influence of artificial intelligence (AI) in enhancing the capabilities of quant funds. AI enables these funds to process vast amounts of data and model complex, non-linear market interactions that traditional models struggle to capture.\n\nHe points out that while Hong Kong has historically served as a \"middleman of capital,\" China is increasingly developing its own quantitative ecosystem.",
  "summary": "Beijing has tightened scrutiny of quantitative trading funds in recent months amid fears they add to market instability. Yet a leading investor believes the future is bright for China’s quant funds, as they are “necessary for a developed economy”. Seth Huang, the head of Aris Capital, said quant funds had such a clear advantage over retail investors on China’s capital markets that the situation…",
  "key_points": [],
  "editors_take": "Quant funds' growth in China, despite regulatory scrutiny, cements their role as a key market player, giving them influence and profits, but also raising questions about accessibility and market impact.",
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}