Hedge fund firm Aspect offers China strategy to global investors

[HONG KONG] Aspect Capital has made one of its China strategies available to international investors for the first time, tapping demand from allocators seeking to diversify their portfolios.

The US$9 billion hedge fund firm began offering the China absolute return systematic futures strategy to global investors in early April, said chief product strategist Razvan Remsing. The strategy, which has been available to mainland investors since July 2019, trades in 65 Chinese futures markets and oversees about US$550 million.

Investors in the Asia-Pacific region and beyond are increasingly looking to diversify both their China and global exposure. Some institutions are reassessing their allocations as mounting geopolitical tensions polarise the world economy. Others are seeking to add more variety to China portfolios that have been dominated by equities.

“We have got a number of structural forces that are enduring,” Remsing said. “The deglobalisation theme has been accelerating and embedded into every investment process and decision-making.”

The strategy’s current assets are equally split between Chinese money in the onshore version and allocations from large international investors to a US dollar-denominated vehicle in the Cayman Islands, Remsing said, declining to identify them.

Macroeconomic developments have also heightened the importance of commodities in investment portfolios. For example, the Ukraine and Iran wars have highlighted concerns about how conflicts can disrupt energy and fertiliser supplies.

“We live in a very fragmented world. We have got energy insecurity,” Remsing said. “At the same time, we have a desperate need for decarbonisation and electrification,” in part to feed surging artificial intelligence demand, he said.

London-based Aspect has been trading in the Chinese futures markets since 2016 and also has a pure China onshore trend-following strategy.

The nearly 30-year-old firm and other so-called commodity trading advisers were traditionally known for trend-following models. Such approaches tend to struggle when markets trade in narrow ranges or quickly reverse.

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Just under 30 per cent of the China absolute return strategy is based on trend-following models. The rest consists of other global macro approaches, such as curve trades, technical models that exploit behavioural patterns, and those based on fundamentals, Remsing said. It trades mostly Chinese commodity futures, together with eight stock index and bond futures.

Trading is based on research by a London-based team. Max Xu, Aspect’s principal researcher leading its futures strategies globally, has played a key role in devising the programme. The Peking University biological science graduate is a nearly 18-year Aspect veteran.

Since the strategy began trading in July 2019, it has generated positive returns every year, including 22 per cent in 2020, 16 per cent in 2024 and 11 per cent in 2025, said Remsing, citing figures of the onshore version converted into US dollars from yuan. That gives it an annualised return of 11.5 per cent to March, including the years when China pivoted away from real estate construction in favour of electric vehicles and technological innovations in areas such as AI and robotics.

Commodity markets have often been the first to respond to such changes.

“China’s futures markets offer a breadth and diversity of opportunity that is very distinct from other markets,” Aspect’s co-founder and CEO Anthony Todd said in a press release.

Many Chinese commodity markets are as liquid as Western counterparts. Others have no international equivalents, such as polyethylene, glass, silicon manganese, urea and potash – materials that are often used in plastics, semiconductor, fertiliser and construction industries, according to Remsing.

A trading programme that gains exposure to those markets not only helps diversify investors’ China portfolios but also expands their global commodity investments, he said.

As an international firm, Aspect can directly access or trade with a so-called qualified foreign investor license in about 45 of the 65 Chinese futures markets targeted by the strategy. It will trade the remaining 20 via “total return swaps” with Chinese counterparties, Remsing said.

Under current market conditions and Aspect’s investment capabilities, the strategy can accommodate as much as US$1.5 billion, including onshore and offshore money, he added. BLOOMBERG