Quant Hedge Funds Are Losing Their Edge in China as Models Fail

Quant Hedge Funds Are Losing Their Edge in China as Models Fail

China’s quantitative hedge funds risk ending years of outperforming the market, after a surge in local stocks spurred by the government’s economic stimulus package last month beat their models and squeezed short positions. Quants’ long-only strategies trailed mainland Chinese stocks’ 22% jump by 2 percentage points in September, turning their year-to-date so-called excess return into…

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