Quant Hedge Funds Outperform Markets Through Trend-Following Strategies
· Business · CNBC, MarketWatch
Computer-driven trend-following hedge funds have achieved significant gains this year by capitalizing on major market shifts, including September's bond rout and the surge in oil prices prior to the Iran war. These quantitative programs and managed futures strategies use statistical models and price signals to trade across equities, bonds, commodities, and currencies. Societe Generale's SG CTA Index posted a 15.7% return in the nine months leading to the end of the third quarter, outperforming the S&P 500's 11.7% rise over the same period. Industry experts note that these funds successfully executed short positions against US Treasurys and took bullish stakes in crude oil. The ability to navigate inflationary pressures through fixed-income shorting has driven strong performance across major fund managers like Man Group, PIMCO, AQR, and Winton Capital.
Why it matters
The outperformance of algorithmic funds highlights a structural shift in how automated trading captures macro volatility compared to traditional portfolios.
Read the original report — CNBC
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