Computer-led equity hedge funds beat human stock-pickers in October
Reuters
Published Nov 01, 2023 03:46PM ET
By Carolina Mandl
NEW YORK (Reuters) - Hedge funds that trade equities using computer programmes defeated human stock-pickers in October by a large difference in performance, according to a Goldman Sachs note.
Systematic long/short hedge funds, as the computer-led strategy is known, posted 4.97% in gains last month, while fundamental long/short went down 0.66%, the bank's prime services team wrote.
The systematic funds' performance was driven by asset selection, volatility and some crowned trades. In the case of the fundamental long/short funds, the detractor was their exposure to stock indexes. In October, the MSCI index of world stocks dropped 2.90%.
In the year through October, systematic long/short gained 15.06%, outpacing the 3.14% in profits that fundamental long/short posted.
As one of the world's biggest prime brokers for hedge funds, Goldman Sachs tracks its clients to show some trends in the industry.
The bank said that overall, hedge funds across different strategies more sold stocks in October than bought, a trend already seen in the two previous months.
Last month, hedge funds also placed bets that stocks in energy, financials, consumer discretionary and information technology will fall.
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