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Opalesque Exclusive: Two managers reveal: What´s wrong with (other) quant funds From Benedicte Gravrand, Geneva: Reuters reported yesterday what investment bank Goldman Sachs Group said in a conference call: "Many funds employing quantitative strategies are currently under pressure as recent conditions have resulted in significant market dislocation. Across most sectors, there has been an increase in overlapping trades, a surge in volatility and an increase in correlations. These factors have combined to challenge many of the trading algorithms used in quantitative strategies." Full article.

Goldman’s quant funds are two of many that have been hit by the credit downturn and volatility jumps: other funds such as Tykhe Capital, Highbridge Capital Management, Renaissance Institutional Equities, Black Mesa Capital, AQR Capital Management have all suffered.

The betting computer model, it seems, is not always able to predict unpredictable turns and trade accordingly. Is this the reason for the quant funds’ recent poor performance? Two quantitative fund managers gave their point of view to Opalesque.

Quants should be as ready as any other investment method for marke......................

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