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The 100 leading hedge fund managers surveyed, who collectively manage over $231 billion in AUM, also reveals that 73% believe the current economic and fiscal environment is attractive for quant strategies, and 86% expect the number of quant hedge funds to increase over the next five years.

SigTech commissioned the market research company Pureprofile to survey 100 hedge fund managers across the UK, US, and Asia. Interviews were conducted online in June 2021.

When asked which quant strategies and asset classes are likely to see the biggest increase in inflows over the next 12 months, the hedge fund managers interviewed predicted FX and equities will see the largest rise, followed by rates, volatility and commodities strategies.

A key reason for optimism in the sector is that 78% of managers surveyed believe that quantitative strategies should perform better in 2021 than they did in 2020

Some 68% say they expect quant strategies to outperform this year.

As the hedge fund industry continues to grow, levels of transparency in the quant market are expected to increase. 75% of hedge fund managers think increased transparency will lead to institutional investors increasing their allocation over the long term.

When questioned about what mattered most to them in trading infrastructure, 65% of hedge funds surveyed said backtesting (providing consistent results between live trading and backtests by factoring in real-life trading costs and market structures) was 'very important'. 52% said clean data was also very important to them. The ability to move seamlessly from research into production and execution (49%) and getting trading strategies to market faster (47%) were also cited as significant features.

New and innovative datasets were also found to have supported the growth in systematic strategies: 24% of hedge fund managers questioned have dramatically increased their analysis of social media and chatroom data over the past 12 months. A further 48% said it has increased, and only 12% said they have focused on this set of market data less.

Over the next two years, 30% say they will dramatically increase their use of chat room and social media data to support signal construction and wider investment decisions. A further one in three (35%) believe their usage of this data will rise slightly.

Over the next two years, over 80% of respondents expect an increase in the use of cryptocurrencies in quant strategies and portfolio management, including 36% who foresee a dramatic increase. 45% predict a slight rise.