As China’s markets gyrate following COVID-19 outbreaks and Russia’s invasion of Ukraine, one of the nation’s best-performing macro hedge funds is bracing for more pain.
Shanghai Banxia Investment Management Center, which topped local rankings in 2020, has cut its stock exposure to zero in anticipation of a worsening economy and further declines in equities, founder Li Bei said. The fund, which manages more than 5 billion yuan ($785 million), has also closed almost all short positions in commodities after rising prices led to losses.
"This year could be even worse for fund managers than 2008” when, even during the global financial crisis, holding government bonds could still be a winning strategy, Li said in an interview this month. "It’s now very difficult to find a place where they can make money.”