Quant hedge funds start digging out of their hole
After weeks of minor losses that one fund executive described as a " long, slow bleed," systematic funds ended July with a strong week, according to a note sent by Morgan Stanley to clients after trading last Thursday.
The note stated that July's final week clawed back roughly 30% of quant losses for the month, "softening the blow for what's otherwise been a strong year." A note from Goldman Sachs' prime brokerage unit said stock-picking quants ended July down 2%, bringing the average fund's annual return to less than 10%.
This figure still bests the average hedge fund and the S&P 500 over the same timeframe, but the summer slowdown put the brakes on what had been shaping up to be a great year.
At London-based Qube Research & Technologies, the fast-growing quant firm fell 4.5% in its flagship fund in July, a person close to the firm told Business Insider, clawing back some losses in the last week of July. The fund is still up more than 13% for the year.
Engineers Gate, the $4 billion manager, ended May up 12%, but lost more than 4% in July, a person close to the firm said. Its 2025 returns now sit at 7.1% through July after a strong close to the month.
Man Group's multistrategy quant strategy, AHL Dimension, lost more than 3% in July, the firm's website shows. The strategy is down close to 9% on the year. Walleye's quant group was the worst performer of the firm's four strategies in July, the firm told investors in a recent update, but was still positive thanks to Asian strategies offsetting losses in the US.
The managers declined to comment.
Since the start of June, a combination of factors, including a momentum sell-off and crowded trades, have stung quant managers. Still, many in the industry were anticipating a significant bounce-back once things reverted.
"We think strong hands should be levering up into this headwind," a mid-July note from former Bridgewater investment committee member and Dark Forest Technologies founder Jacob Kline read.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Upturn
2 minutes ago
- Business Upturn
TCS partners with Now Corporation to power Philippines' sovereign data cloud and boost financial inclusivity
By Aditya Bhagchandani Published on August 11, 2025, 14:09 IST Tata Consultancy Services (TCS) has entered into a strategic partnership with Philippines-based Now Corporation's telecom arm, Now Telecom, to strengthen the country's national digital infrastructure and promote financial inclusivity. The collaboration, formalised through a Memorandum of Understanding, will focus on building the Philippines' Sovereign Data Cloud, enhancing cybersecurity measures, and enabling citizen-centric digital services. As part of the initiative, TCS will provide sovereign cloud technology, a cyber-defense suite, and solutions for operational interoperability, resilience, and reduced dependency on foreign systems. The company's TCS SovereignSecure Cloud™ will be deployed to ensure local data control, support AI infrastructure development, and enhance operational continuity. Key areas of focus include safeguarding national data from external threats, enabling cross-agency collaboration, and protecting critical infrastructure from evolving cyber risks. Citizen services in digital infrastructure, healthcare, and digital banking will also be prioritised. NOW Group Chairman Mel Velarde described the collaboration as a 'significant step' towards enhancing digital sovereignty, reducing reliance on foreign technology, and creating a robust data infrastructure. TCS, operational in the Philippines since 2008, supports clients across telecom, banking, real estate, and airlines. This partnership further strengthens its presence in the country while aligning with the Philippines' push towards a secure and future-ready digital economy. Ahmedabad Plane Crash Aditya Bhagchandani serves as the Senior Editor and Writer at Business Upturn, where he leads coverage across the Business, Finance, Corporate, and Stock Market segments. With a keen eye for detail and a commitment to journalistic integrity, he not only contributes insightful articles but also oversees editorial direction for the reporting team.
Business Insider
2 minutes ago
- Business Insider
Bad news for US shoppers: The cost of everything from laptops to cars is likely to keep rising
American consumers are beginning to feel the pinch from the US's latest wave of import tariffs, and the pain is expected to get worse. Since returning to office, President Donald Trump has imposed a blanket 10% baseline tariff on all foreign imports, additional varying rates on specific countries, and a series of product-specific duties, including on automobiles. So far, consumers have absorbed just 22% of the tariff costs associated with this year's increases, according to a new Goldman Sachs report published Sunday. But by October, that share could rise to 67%, if pricing patterns continue to follow those observed earlier in the year. Goldman reached that conclusion by analyzing import and consumer price data through June. "Descriptive evidence shows that goods categories heavily exposed to imports have indeed experienced sizable price increases since the beginning of this year, relative to their prior trends," they wrote. Specifically, prices of household appliances and information processing equipment — such as computers and electronics — have increased by 7.5 percentage points more than what they would've cost without the tariffs, they wrote. What's especially striking is who's been absorbing tariff costs so far. US businesses have born the brunt, covering about 64% of costs through midyear, Goldman found. Meanwhile, foreign exporters have cut prices to stay competitive, absorbing around 14%. But that's expected to change. According to Goldman, tariffs have already contributed about 0.20 percentage points to core Personal Consumption Expenditures inflation — the Federal Reserve's preferred inflation measure. They expect an additional 0.16% increase in July, and another 0.5% from August through December. Some major companies, including Adidas and Walmart, have said that they will be hiking prices in the US. That means consumers may face higher prices on everything from electronics to cars heading into the holiday shopping season. Goldman expects core PCE inflation at 3.2% year over year by December — well above the Fed's 2% target. Without tariffs, Goldman says, the underlying inflation trend would be closer to 2.4%. Treasury data shows that the federal government has collected over $100 billion from customs duties so far this year — a sign that "someone is paying" for the tariffs, wrote Deutsche Bank last month.
Bloomberg
2 minutes ago
- Bloomberg
Qatar Gas $1 Billion Loan Adds to Middle East Funding Frenzy
Qatar Gas Transport Co. is seeking a $1 billion syndicated loan, according to a person familiar with the matter, adding to the flurry of Middle East borrowers that have tapped Asian lenders recently. Mizuho Bank Ltd. is the sole mandated lead arranger and bookrunner of the five-year deal, the person said, who asked not to be identified discussing private matters. The deal carries a greenshoe option, which allows the size to increase by an additional $330 million, the person said.
