China's quantitative hedge funds suffered widespread losses in October as a sharp technology sector selloff erased their gains for 2026, threatening to disrupt a period of strong performance and investor inflows, according to a report by Bloomberg.

All six long-only quantitative strategies tracked by China Merchants Futures declined more than 10% during the month, leaving them with year-to-date losses of at least 6%. Market-neutral strategies also struggled, recording declines of between 3% and 5% despite using short positions to hedge market exposure.

Funds tracking the CSI 1000 Index were particularly hard hit, falling 16.7% in October and bringing their annual losses to 13%. Strategies linked to the CSI 300 declined 11%, leaving them down 8.5% for the year, as China's benchmark index suffered its worst monthly performance in more than a decade.

Quantitative managers also underperformed their benchmarks across all six long-only strategies during October, with the largest shortfall reaching 4.4 percentage points against the CSI A500 Index. However, the strategies retained some relative outperformance for the year, with CSI 2000-linked products outperforming their benchmark by 18.5 percentage points.

Separate data from Shenzhen Golden Axe Fund Sales showed that 68 CSI 1000 index-enhancement products lost an average of 9.3% in the final week of October. All but one were recording losses for the year, with the worst-performing fund down 26%.