Hedge funds that use computers to follow trends lost money
for a second straight year in 2012 as political debates over the U.S. fiscal
cliff and Europe’s sovereign-debt crisis roiled markets, reports Bloomberg.
The Newedge CTA Trend Sub-Index, which tracks the
performance of the largest computer-driven, or quant funds, fell 3.4 percent
last year after a 7.9 percent decline in 2011. David Harding’s $10 billion
Winton Futures Fund Ltd. slid 3.5 percent in 2012, its second annual decline
since opening in 1997, investors in the pool said. Man Group Plc (EMG)’s $17
billion AHL Diversified fund fell 2.1 percent, while BlueCrest Capital
Management’s $14 billion trend-following fund gained 0.02 percent, said the
investors, who asked not to be identified because the figures are private.
The performance of the funds belies their popularity with
investors, who’ve poured $108.2 billion into the pools since the end of 2008,
according to Fairfield, Iowa-based BarclayHedge Ltd. While quants made money
during the financial crisis when other hedge funds didn’t, they’ve since
stumbled as market sentiment swung from optimism to pessimism based on
political announcements in Washington and Brussels, breaking up the trends they
try to follow. That may force investors to withdraw money….
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