Quant funds in China are being deluged with investors' money as their rapid adoption of artificial intelligence helps them trounce human stock pickers. Ubiquant, one of the top players, raised 2.6 billion yuan ($384 million) in less than two hours for a new fund in May, while investors snapped up over 100 million yuan of a product from Shenzhen ChengQi Asset Management Ltd. within seconds. Quants' assets under management have more than doubled in less than a year to more than 2.6 trillion yuan, fueled by long-only stock quants gaining 44.7% last year and beating discretionary rivals by 20.3 percentage points. New quant products more than doubled last year to 6,296, accounting for 46% of all new hedge funds, and among the more than 3,000 new products registered by top managers, more than 80% were launched by quants. The success marks a stark reversal from two years ago when the sector faced regulatory ire, exemplified by Ningbo Lingjun Investment Management Partnership, which rebounded from a 2024 trading crisis to lead top quants with an average return of more than 70% last year and now aims to expand assets under management by between 20 billion yuan to 40 billion yuan. Investment logic has shifted to choosing the quant with the strongest AI capabilities, concentrating inflows on top players, while traditional stock pickers like Shanghai Minority Asset Management Co. are racing to embrace AI, and foreign asset managers find it difficult to raise money without a quant strategy. However, the average excess return from popular index-enhanced funds shrank by more than half from a year earlier to 4% this year through April 30, signaling that beating the market will become more difficult as machines compete against machines.
Traditional stock pickers like Shanghai Minority are racing to embrace AI as quants dominate, indicating competitive pressure.
Ubiquant Investment (明汯投资管理有限公司)Private± Mixed
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