Investors should take reports of the launch of “China’s first hedge fund” with a pinch of salt. Private pools of capital with hedgie-like fee structures have been around for ages, often trading commodities futures or offshore equities. But a new offering by E Fund, China’s second-largest asset manager, is significant nonetheless. A month after the securities regulator said it would allow separately managed accounts at registered asset management companies to trade stock index futures, a manager has been granted permission to do just that. As this is China, a dozen copycat funds should be licensed within days. Domestic institutions can therefore start tiptoeing into the realm of equity hedge and relative value: the world’s most popular hedge fund trading strategies.

Few stock markets lend themselves to directional punts quite like China’s. In each of the past seven years, the Shanghai Composite has finished in either the top or the bottom quintile of world equity index rankings; so far this year, it is 82nd of 93. But up to now, an insurer or the retirement fund of a state-owned enterprise that wanted to make money while the benchmark was sinking had to jump through hoops to invest in small private funds operating outside direct government supervision. In theory, easier access to bigger, licensed hedge funds should improve returns for many. Not holding assets when the price falls is good, but a short position is better.

Overall, the Chinese equity market remains ruled by speculators more concerned with momentum than value. Data from Z-Ben, a fund consultancy, shows that the best returns consistently accrue to funds that have been good at timing shifts into cash. The E Fund will try to do just that, more efficiently. If Shanghai is still a casino, it is now a slightly higher class one.