JPMorgan Says Quant Underperformance "Has Not Been Abnormal"

In a research piece titled “Quant funds underperform,” JPMorgan analyst Nikolaos Panigirtzoglou and his Global Markets Strategy team think they understand the causation. With hedge fund allocation inflows towards quant funds pulling in near 30% of all hedge funds, this occurs at a time when the human-based manager just might be winning against the machines.

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Quant hedge fund performance has been anemic

With nearly $940 billion under management, representing 30% of all hedge fund assets, quantitative hedge funds also have been gobbling up a large share of investor and media attention over the past 8 years. This is due in part to the macroeconomic trend of how intelligent computer automation impacts society,...