Ningquan Asset Faces Largest Drawdown Since Inception in June, Citing Underestimated AI Bubble

According to Guru Club, Ningquan Asset's fund experienced its largest drawdown since inception in June 2026, comparable to bear market losses, prompting the firm to issue an apology to investors. The Beijing-based investment manager acknowledged in its semi-annual report released on June 23 that the fund's performance fell short expectations this year, with June marking an unprecedented challenge during a bull market period.

The drawdown was attributed to underestimated risks in China's AI infrastructure bubble, particularly affecting Ningquan's substantial holdings in internet giants. The firm noted that despite tech companies' strong fundamentals—including capital reserves, computing resources, and data assets—they significantly underperformed their U.S. counterparts amid inflated valuations. Ningquan cited the boom in AI-related manufacturing as the primary driver of excessive speculation, likening current market conditions to the 2015 bull market's "blind buying" phenomenon, despite weak long-term competitive advantages in underlying businesses.