"For many quants, the painful start of October brought back memories of June and July, when systematic funds were slammed due to crowded trades, a momentum sell-off, and artificially inflated junk stocks. Indeed, in the first week of October, Renaissance Technologies - the legendary quant firm founded by the late billionaire Jim Simons - had given away all of its gains on the year in its two biggest funds for external investors."
"According to HSBC's Hedge Weekly report, the two funds finished the month in the red for the year. Renaissance's Institutional Equities fund was down more than 14% in October, and the strategy's 2025 losses stand at 8.3%. The Diversified Alpha strategy lost more than 15% last month, putting its year-to-date losses at 10.5%. Renaissance Technologies declined to comment. Meanwhile, Paris-based Capital Fund Management's two largest funds - Stratus and Discus - also lost money in October;"
October began with one of the worst four-day trading stretches on record for computer-run hedge funds, with the average quant fund losing 1.8% through the first week. Early-month weakness recalled June and July when systematic strategies were hit by crowded trades, momentum unwinds, and inflated junk stocks. Renaissance Technologies' Institutional Equities fell over 14% in October and its Diversified Alpha lost more than 15%, leaving those strategies down 8.3% and 10.5% year-to-date, respectively. Paris-based Capital Fund Management's largest funds also lost in October but remained positive for the year. Late-month gains helped many quant strategies recover to finish the month roughly flat, and stock-trading quant strategies were up about 13% year-to-date.
Read at Business Insider
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