The outsized gains enjoyed by China’s hedge funds are putting them ahead of their foreign competitors and helping attract more assets. This according to a recent article in Bloomberg.

“The nearly 15,000 funds offered by Chinese managers returned 30% on average last year,” the article reports, “with the best-performers surging 10-fold” and dwarfing the average 12% gain for hedge funds across the globe. The outperformance is yet another roadblock for global funds such as Bridgewater Associates and Two Sigma, both of which have reportedly struggled to enter China’s 3.8 trillion-yuan ($588 billion) hedge fund market since it became available to foreign firms four years ago.

The article reports that China’s early recovery from the pandemic “fueled rallies in stocks and commodities” and lifted returns across all hedge fund strategies.

“Money is increasingly gravitating toward the biggest players,” according to Hengtian Wealth Management’s head of research Liu Ke, “with the top 10% soaking up most of the inflows.” He adds, “Although foreign managers have stronger name recognition globally, the past two years showed that Chinese quant players still have the edge so far.”

Yan Hong, director of the China Hedge Fund Research Center at the Shanghai Advanced Institute of Finance is quoted: “Foreign players are handicapped in China.” But he qualified his remark by pointing out, “it’s not a game where success is determined in the short-term. As policies loosen further, foreign player’s advantages could gradually emerge.”