Trouble for Quant Hedge Funds

The rise in market volatility has resulted in poor results for many quant funds, according to a recent Bloomberg article that says, “They were caught flat-footed in February when markets turned turbulent on concern over rising interest rates, followed by trade wars with China and the election in Italy.”

The article reports that Renaissance Technologies, the world’s most profitable hedge fund, is trailing its benchmark in one fund this year (through mid-June) and that Jaffray Woodriff, who runs Quantitative Investment Management, “lost 35 percent in his tactical aggressive fund this year through May.” Manoj Narang, who started a hedge fund last year, suffered the exit of its biggest investor, JPMorgan Chase & Co.’s asset management unit.

“Some of the biggest quant funds haven’t been immune to the woes facing their smaller rivals this year,” the article reports.