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Quant hedge fund pioneer Aspect Capital launches China-focused futures strategy

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Quantitative hedge fund and CTA pioneer Aspect Capital has unveiled a new systematic momentum-based investment strategy focused on Chinese financial and commodities futures, tapping into the expanding global institutional investor appetite for opportunities there.

The Aspect China Diversified Fund – which launches with more than USD100 million in external capital – uses the London-based firm’s systematic medium-term trend-following models to trade more than 40 onshore Chinese futures markets spanning six asset classes: agriculturals, bonds, energies, industrials, metals and stock indices.

The strategy brings the firm’s expertise in systematic investment to global investors who are keen to tap into the opportunities offered by Chinese markets. Specifically, the new strategy will offer weekly liquidity with an annualised volatility of 15 per cent.

Aspect aims to capitalise on growing investor demand for new opportunities in China, and diversified and uncorrelated returns, and will tap into its extensive decade-plus research into the country’s markets. The firm has also been accessing onshore Chinese futures markets in conjunction with an onshore partner since 2016.

“We are excited to be able to leverage this research, and five years’ experience in applying systematic investment models to onshore Chinese futures markets, to provide investors with this compelling opportunity to access a new, uncorrelated, diversifying return stream,” said Aspect CEO and co-founder Anthony Todd.

“With uncertainty over the sustainability of current equity market valuations, declining bond yields and the looming threat of inflation, we believe now is an interesting time for investors to consider adding exposure to Chinese financial and commodity futures markets to their portfolios.”

Established in 1997 by Todd and Martin Lueck, who earlier ran CTA pioneer AHL – which is now part of Man Group – Aspect today manages USD9.3 billion across a range of systematic hedge fund strategies, spanning managed futures, multi-strategy, alternative risk premia, and currencies.

Earlier this year, the firm rolled out a new daily-liquid UCITS-compliant version of its Aspect Core Diversified Programme, a medium-term quantitative trend-following strategy originally launched in 2014, to tap into allocator demand for uncorrelated returns amid growing market uncertainty. The computer-driven strategy looks to generate alpha by trading an assortment of medium-term trend opportunities across more than 100 liquid financial and commodity markets.

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