Chinese quantitative hedge funds reported an average loss of 17% in July 2026 following a market correction in AI-linked stocks. Despite this, most managers continue to prioritize investments in artificial intelligence and semiconductor companies.
A Bank of America survey conducted in August 2026 revealed that 95% of 98 surveyed Asia-based fund managers maintained or increased their focus on AI and chip stocks. Approximately 73% of respondents identified these sectors as their primary investment areas.
As of July 2026, assets in Chinese quant hedge funds exceeded RMB 2.6 trillion, or approximately $385 billion. In 2025, long-only quant strategies achieved returns of 44.7%.
Individual performance varied significantly before the July downturn. The Growth Strategy No. 3 Fund from Shanghai Everlead Capital returned 164% through May 31, 2026, while Hunjin Capital’s Yueyang G1 fund gained about 33% in the same period.
The July correction caused losses exceeding 20% for at least one fund managed by Zhejiang High-Flyer Asset Management. Firms like Shanghai Everlead Capital and Hunjin Capital responded by reducing exposure to optical communications and advanced packaging subsectors.
Wealspring Asset warned of an AI stock bubble in June 2026. While some funds are trimming speculative holdings, they are largely maintaining core positions in companies with more stable business models.
