Follow us on LinkedIn
Last month, institutionalinvestor.com reported that AI-powered hedge funds outperformed their peers,
Hedge funds with artificial intelligence capabilities showed a huge competitive edge over investors that didn’t use AI, new research indicates.
AI-led hedge funds produced cumulative returns of 34 percent in the three years through May, a report Tuesday from consulting and research firm Cerulli shows. That compares with a 12 percent gain for the global hedge fund industry over the same period. Read more
However, things are not so bright under the surface. It was recently reported that one of the largest AI hedge funds is underperforming,
Voleon Group, one of the world’s biggest and best-performing artificial intelligence hedge funds, has suffered large losses after being hit by choppy markets, making it one of a number of computer-driven fund managers to struggle this year
…like many computer-driven funds, Voleon was caught out by this year’s market turmoil. That had left the Investors fund down by double digits earlier this year, and the Institutional Strategies fund down single digits, say people familiar with its returns.
Voleon is unusual in that, while many quantitative fund firms use a small element of machine learning in their investment process, very few focus solely on this approach. Machine learning involves letting algorithms learn and extrapolate rules from the data, rather than a human setting the rules an algorithm should follow. The firm trades a strategy known as statistical arbitrage, which involves betting that short-term discrepancies in prices will revert to a mean. Read more
Further questions
What's your question? Ask it in the discussion forum
Have an answer to the questions below? Post it here or in the forum

Workers with data, analytics, or AI experience are a hot commodity, taking home a median $900,000 last year.
The increased likelihood of US spot ETFs for crypto means bitcoin could even reach $100,000 before the end of 2024, analysts said.
At the famous Harvard-Yale football game, I tailgated and even stripped in the stadium as part of a strange tradition. I loved every moment of it.
Mary Minahan said she's had clients who got tattoos of their partner's name return a few weeks later to have them covered up after a breakup. So now she won't do them anymore.

It's a sign they're still unhappy with the economy.