The machine shines in Hong Kong A-share fund

Strategy run by ChinaAMC (HK) combines machine learning with human judgement to outdo rivals

Don Huang of Magnum Research (left) and Frederick Chu of ChinaAMC (HK)

China’s falling stocks have wrong-footed scores of fund managers this year but a Hong Kong-based quantitative fund has a different story to tell.

The multi-factor strategy, long-only fund, managed by China Asset Management (Hong Kong) or ChinaAMC (HK), invests in yuan-denominated equities of China’s mainland companies known as A-shares. It has returned 6% so far this year, while peers have lost money.

The fund’s so-called AI China Alpha Strategy uses a machine learning algorithm to identify