Ex-Wall Street bankers are betting science can exploit opportunities in China’s often rumour-driven stock market, with some predicting the quant-driven fund industry to grow by as much as 10-fold to 100 billion yuan within a few short years.
Former Goldman Sachs banker Shen Yi is confident his newly-launched 20 million yuan ($3.17 million) quant fund, which trades purely on complex mathematical calculations pre-programmed in computers, can beat the market.
“Models sum up history and predict the future,” said Shen, who holds a doctorate degree in physics from Oklahoma State University. “Markets change, but human nature doesn’t.”
Since 2010, when China rolled out index futures, margin trading and short selling, more than 30 quant funds, or those that use statistical models rather than fundamental analysis to make investment decisions, have been launched, many of them by former Wall Street bankers like Shen.
There are no official or industry data on the…
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