Systematic long-short hedge funds which employ computer algorithms to trade equities registered a strong performance advantage over fundamental long-short funds run by humans in October, according to a report by Reuters.
The report cites a note from Goldman Sachs’ prime services team as highlighting that while algo-driven funds posted gains for 4.97% last month, their human counterparts were down 0.66%.
Systematic funds benefited from asset selection, volatility and some crowned trades, according to Goldman Sachs while fundamental funds were hurt by their exposure to stock indexes, with the MSCI index of world stocks dropping 2.90% over the month.
In the year to the end of October, the performance gaps is even wider, with systematic long-short funds having gained 15.06%, ahead of 3.14% return for fundamental long-short
