Huge losses have been experienced by Quant Hedge in the year 2020 as failure is witnessed by machine-powered strategies in terms of predicting the unprecedented trends in the market. These particular quant equity funds are struggling because of the introduction of the latest trends in markets as a result of pandemic spread that contains no past precedent. The machine-powered strategies of stock picking are outperformed by human stock pickers in the year 2020, particularly due to investments in consumer discretionary and tech stocks which are availing benefits of the policies related to pandemic. For Quant funds, the Q1 of 2020 was worst as they fall 3% on average in February and 4.3% on average in March, as reported by Aurum. This shows that quants funds experienced a failure to prosper or grow at the time whereby the markets observed an unprecedented decline in the prices of stocks. Our article is based on the post shared by Insider Monkey related to 5 Biggest Quant Funds and we have selected these funds in accordance with their research.
Our list starts with Winton Group which is a London-based flagship fund and is following strategies that are computer-driven. This stock experienced a loss of 10% in October 2020. According to the reports of Insider Monkey:
“The market value of its 13F portfolio stood around $3 billion at the end of the September quarter with $3.5bn assets under management. BRK.A Berkshire Hathaway Inc (NYSE: BRK.A) is its largest stock holding, accounting for 2.16% of the portfolio. The fund likes to make aggressive changes in its stock positions to take advantage of price movements.”
The next company that we have selected as the biggest quant fund is Two Sigma. This quant fund was established in the year 2001 by David Siegel and John Overdeck. Huge profits were received by this quantitative powerhouse since its start but is struggling for the last few years. The return of the company reduce by 5% since November and the macro fund’s absolute-return declined by 23%. According to Insider Monkey:
“Two sigma is managing $66 billion of assets under management and 13F portfolio values stood around $28 billion at the end of the September quarter. Microsoft (MSFT) and Home Depot (NYSE: HD) are the two largest stock holdings of the Two Sigma 13F portfolio. Shares of HD rallied 22% in the last twelve months.”
Want to know more about these 2 quant funds along with others? Just head to 10 Biggest Quant Funds in The World, 10 Stock Picks.