C8, a fintech platform that offers investors the ability to use direct indexing across all liquid asset classes and investment styles, has launched a China Futures Access vehicle for offshore investors.
The strategy, used by C8’s Chinese onshore clients since 2018, provides institutional investors access to some of the world’s fastest developing futures markets via up to 50 commodity contracts.
The pace of innovation in China’s futures markets is accelerating, particularly in the commodity complex. Recent developments include the launch of the Guangzhou Futures Exchange in April 2021, China’s fifth futures exchange, focused on environmental products including carbon futures which are seen as a critical component of meeting net zero commitments.
Similarly, China is committed to further opening its capital markets to overseas investors. The extension of the QFII programme to allow the inclusion of futures is a good illustration, as is the introduction of the country’s first Futures Law which provides a comprehensive legal and regulatory framework governing the operation of the futures markets in mainland China.
C8 is committed to being at the forefront of these many developments, offering institutional investors early access to the opportunities they present. The China Futures Access programme is diversified by market, investment style, risk profile and trade frequency. It is designed to remove uncertainty from the portfolio of forecasts by cross-fertilising ideas from disparate fields, such as:
Statistical signal processing
Machine learning, pattern recognition and data mining
Exploratory data analysis
Robust optimisation
Macro- and micro-economics
Technology and software engineering
The programme is directional with positions are dimensioned in proportion to the expected return in any given asset
Positions are dimensioned inversely to prevailing levels of volatility
Mattias Eriksson, Co-founder and CEO of C8 Technologies, says: “The recent Draft Futures Law, which sets out trading and settlement principles that are consistent with international markets, is a vital step in the development and growth of these markets which are evolving quickly. As the world’s largest consumer of many major commodities, China is incentivised to improve its attraction and influence as a key trading centre.
“Professional investors have long faced barriers to entry but, as the many signals of market development indicate, this is changing. That is why we are committed to offering our clients innovative products that allow them to gain early exposure to this opportunity set. Our China Futures Access index acts as a gateway through which investors access this exciting market in a risk-adjusted manner.”
