Chinese hedge fund Shanghai Chaos Investment Co. apologized to investors for losses from a deepening rout in the country’s financial markets. It also said it’s not giving up.

“We made the wrong call with our investment strategy as we overestimated the impact of government rescue efforts,” the company said in a letter to investors dated Aug. 31 obtained by Bloomberg. “This led to a significant reduction in the net asset value of our funds and we are deeply sorry for causing our investors stress and unease.” The contents of the letter were confirmed by a Shanghai Chaos official who asked not to be identified because the matter is private.

China’s surprise devaluation of the yuan last month and a crash in domestic shares has roiled global stock and commodity markets amid speculation that a slowdown in the world’s second- biggest economy may be worse than previously estimated. While its central bank last week cut interest rates for the fifth time since November in a bid to calm investors, Goldman Sachs Group Inc., the nation’s top-ranked forecaster, on Monday cut its estimate for growth next year.

“The losses suffered are representative of how much damage the recent market rout has dealt the investment community as Chaos is a bellwether of the local hedge fund industry,” Fu Peng, a portfolio manager at Lianzhan Global Macro Fund Management Co., said by phone from Beijing.

Market Slump

The net asset value of the company’s flagship Chaos Number 1 Value Fund plunged 37 percent in the two weeks through August 28, while its three-month-old Number 2 A/B Value Fund sank 19 percent, data from its website show. The Shanghai Composite Index of equities dropped 18 percent in the same period as returns from raw materials measured by the Bloomberg Commodity Index fell more than 1 percent.

“We won’t be scared off by the market rout because we now have an opportunity to buy into companies that we think are of good value at low prices,” Shanghai Chaos said in the letter. “Investing is a battle with human nature. Excessive panic after a market slump is as risky as excessive optimism after a market rally.”

The net asset value of the Chaos Number 1 Value fund, set up in July 2014, was at 1.5295 as of Aug. 28, from 2.4439 two weeks earlier, according to data on the company’s website. The net asset value of the Chaos Number 2 A/B Value fund, set up in June, was at 0.6650 as of Aug. 28, from 0.8220 on August 14, the data show.

By comparison, Greater China hedge funds tumbled about 10 percent in August, putting them on track for their biggest decline since at least January 2000, according to preliminary estimates from Eurekahedge Pte.