China-heavy funds had their worst-performing month since January 2016 in June, Bloomberg reports, after a slump in the country’s benchmark stock indices and tumbling currency rattled investors’ confidence in the Chinese market.
Hedge funds managed by firms such as Modus, Yuanhao, and even Wall Street giants like Morgan Stanley saw an average of 4.4% losses in June, according to market researchers Eurekahedge. The Shanghai Composite fell 8% over the course of the month as trade rhetoric from the US and Beijing turned into action with the signing of a first round of tariffs by both sides.
The yuan, meanwhile, has lost 4.5% on the dollar since the middle of last month.
“The sudden turn of sentiment starting mid-June has resulted in a panic stampede as investors sell shares indiscriminately,” said Modus in its company newsletter, adding that it expects the government to use lower import tariffs and income tax cuts to buoy consumer confidence and domestic demand.