Definition of quant fund

Quant funds are funds that use quantitative analysis using computer-based models to inform their decisions on whether to buy or sell securities. Quant strategies are often used by hedge funds. They offer de-correlation benefits in that managers are not stock picking and instead are relying on a computer's dispassionate assessment of price and value criteria. Quant hedge funds sometimes use CTA (commodity trading adviser) or managed futures strategies which attracted a good deal of attention during 2008. In that year, while nearly every investment strategy failed, CTAs rose 17 per cent.

 

quant funds in the news

In June 2013 it was report that some of the world's biggest quant hedge funds had suffered steep losses in the previous two weeks following a sell-off in US bond markets. Many quant funds had been major buyers of bonds as their algorithms had followed yields lower over the preceding years. Winton, the world’s largest quant fund, managed to sidestep the worst of the losses becasue it had diversified its algorithmic trading programmes into equities and away from the traditional focus in futures contracts.

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