China’s quantitative hedge funds posted steep weekly losses through July 17 as a selloff in chip and AI shares hit small-cap stocks.

A CSI 1000-linked fund at DeepSeek founder Liang Wenfeng’s Zhejiang High-Flyer Asset Management, a China-based quantitative hedge fund manager that also backs AI startup DeepSeek, fell 15.7%, according to data seen.

A similar product at Beijing-based HanTak Investment Management lost an estimated 16.1%.

The CSI 1000 Index fell more than 12% over the week, its worst drop since a quant selloff in February 2024.

The index tracks 1,000 small, liquid China A-shares and is heavily weighted toward industrials, information technology, and materials.

High-Flyer oversees more than 70 billion yuan (US$10 billion).

HanTak told investors the losses followed a reversal in high-momentum growth stocks, along with higher volatility, weaker margin financing, initial public offering liquidity concerns, and broader deleveraging.

The recent weakness followed a global selloff in chip stocks and stronger worries about an AI bubble.

🔗 Source: Bloomberg