Chinese futures in general add substantial diversification benefits to global futures – and the Chinese commodity futures that dominate certain Aspect Capital strategies also provide diversification versus financial futures within China. Aspect China Absolute Return Programme has shown long term average correlations to conventional asset classes globally or in China – and to a variety of hedge fund strategies including trend following – inside the +/- 0.20 range generally deemed to be statistically insignificant.

Aspect Capital has been active in China’s growing futures markets since 2016, but their approach has adapted and evolved by optimising models and access routes while establishing a local presence. 

Timeframes are a key differentiator in Chinese markets, where speculative retail activity represents a significant share of trading volumes – unlike in Western futures markets. As a result, Aspect’s models operate at relatively higher speeds in China, with shorter average holding periods, (that still remain well above high-frequency strategies, which are constrained by regulation).

The strategy mix has also decoupled from Aspect’s flagship programme that is approximately 80% trend following. “When we launched the offshore China vehicle in 2021, it was predominantly trend following. It has now adopted a more balanced multi-strategy approach that we have traded onshore in China for several years”, says Aspect Capital’s Christopher Reeve, who became Chief Investment Officer in January 2026, having previously been Chief Risk Officer. He joined the firm in 2005, some 7 years after it was founded in 1997.

“When we launched the offshore China vehicle in 2021, it was predominantly trend following. It has now adopted a more balanced multi-strategy approach that we have traded onshore in China for several years.”

Christopher Reeve, Chief Investment Officer at Aspect Capital.

The Aspect China Absolute Return Programme trades four broad themes. The momentum theme is conceptually similar to Aspect’s flagship trend following programme but its nine trend speeds are tailored to the shorter-term price action in the Chinese markets. The other three themes – technical, term structure and value – have been present in various Aspect strategies over the years but are also modelled to match the unique features of Chinese futures.

“The four themes are broadly equal-weighted and so are the underlying models within each theme. This strategy is not timing or dynamically reweighting themes or models,” confirms Reeve.

Access routes 

Back in 2021, Aspect needed to access most of the Chinese futures markets using cross border swaps with Chinese banks in Hong Kong, which were relatively expensive. “Now costs have come down because we can invest directly in both the growing number of internationalised futures and via our QFI license to trade onshore. We only use swaps where we cannot access markets through either of these direct routes,” says Reeve. The programme trades 15 internationalised futures, 27 accessible via a QFI license, and another 20 that can be traded via total return swaps.

“Now costs have come down because we can invest directly in both the growing number of internationalised futures and via our QFI license to trade onshore. We only use swaps where we cannot access markets through either of these direct routes.”

Christopher Reeve, Chief Investment Officer at Aspect Capital.

Aspect now has a subsidiary and office in Shanghai with six people and its own PFM (Private Fund Manager) license.  This enables Aspect to run onshore Chinese private vehicles trading the same programme, and raise assets from the onshore Chinese market as well. 

The strategy is more operationally intensive because the three routes involve different brokers and Aspect needs to comply with a variety of rules and regulations. Margin to equity ratios however are only modestly higher than in Aspect’s traditional markets CTAs.

Investment universe 

The programme trades over 60 markets of which 90% are commodities, split into agriculturals, industrials, energies, metals and freight, with smaller sleeves in stock indices and bonds. 

Chinese bonds have been a useful diversifier: they often moved differently to western bond markets in recent years as China dealt with deflation rather than inflation and cut rates to all time lows. 

Commodity diversification 

Nearly all of China’s futures markets are commodity-focused. The exchange landscape comprises a single financial futures exchange – the China Financial Futures Exchange (CFFEX), located in Shanghai – and five commodity exchanges: the Shanghai Futures Exchange (SHFE) and its international subsidiary, the International Energy Exchange (INE), alongside the Dalian Commodity Exchange (DCE), the Zhengzhou Commodity Exchange (ZCE), and the more recently established Guangzhou Futures Exchange (GFEX).

China’s biggest commodity futures rank within the top 10 and 20 most active commodity contracts globally. China continues to add new futures  – both local and internationalized – for commodity markets, some of which are globally unique while others offer diversification benefits versus similar Western markets: “Wheat, sugar, soybeans and cotton in onshore China behave very differently to equivalent western contracts due to local weather, supply and demand factors as well as transport and storage costs,” points out Reeve. “And in April 2026, after the Strait of Hormuz disruptions, China’s containerized freight contract went up a lot while global bulk shipping contracts declined,” he adds.

“Wheat, sugar, soybeans and cotton in onshore China behave very differently to equivalent western contracts due to local weather, supply and demand factors as well as transport and storage costs.”

Christopher Reeve, Chief Investment Officer at Aspect Capital.

The Jujube, or red date, used to make warming winter teas, is unique to China futures as are eggs and PTA (Purified Terephthalic Acid) used in polyester and plastics. Portfolio diversification has been further enhanced using Aspect Capital’s proprietary techniques. 

Incidentally, Aspect’s onshore and offshore China vehicles’ investment universe are now almost identical though the offshore does not trade two coal contracts – coke and coking/metallurgical coal and the Chinese 2-year bond contract.

Alternative markets and capacity targets 

Aspect’s Alternative Markets strategy sub-allocates to the offshore China vehicle. Both Aspect’s Alternative Markets and its China programmes also run lower levels of assets than some other alternative markets CTAs. For instance, current assets are around $550 million across both onshore and offshore China programme vehicles.

Reeve estimates capacity for the China strategy at USD 1 to 1.5 billion, which sounds like a relatively conservative target in relation to the market size.

Aspect has seen interest in the China Absolute Programme grow as investors look for independent drivers of returns – and as a way to diversify existing Chinese equity exposure. 

Note: Any opinions expressed are subject to change and should not be interpreted as investment advice or a recommendation. Any person making an investment in an Aspect Product must be able to bear the risks involved and should pay particular attention to the risk factors and conflicts of interests sections of each Aspect Product’s offering documents. No assurance can be given that any Aspect Product’s investment objective will be achieved.