Wen Feng Liang's Magic Square Quant Fund Plunges Across the Board in July, with All 9 Products Falling Over 20%

According to Dongcha Beating monitoring, Liang Wenfeng's Huafang Quant encountered a significant drawdown in July. Of the 9 products publicly displayed on the Private Fund's P2P Network, the net asset value of all products fell by over 20% in a single month. The product with the largest decline was the Huafang CSI 500 Quantitative Pursuit No. 1, which fell by 22.15% in a month. As of July 31, only 1 product maintained a year-to-date positive return of 0.04%, while the remaining 8 all turned into losses.

This time, it was not just Huafang that encountered a setback. From July 13th to 17th, the CSI 500 fell by about 11.7% in a single week, with the CSI 1000 and CSI 2000 both dropping by over 12%. During the same period, all 10 Huafang quantitative long products fell by over 15% in a week. Leading institutions such as Mingshi, Pingsquare, Jiukun, and Minghong also experienced simultaneous retracements.

The industry attributed the reason to overcrowding in technology growth stocks and high momentum strategies. After a sudden market style reversal, similar strategies underwent concentrated rebalancing, turning previously profitable factors into rapid sources of losses. In the first half of this year, the average excess return of 1236 index-enhanced products was only 3.11%, compared to 14.17% during the same period last year.