Machines taking over hedge funds despite lack of evidence they outperform humans

CNBC reports that a revitalization of the hedge fund industry seems to be more dependent on machines than on humans.

Hedge funds are using computers to detect patterns and alter investment decisions through algorithms. Some hedge funds are sifting through alternative data — or sources not considered traditional in finance like annual reports — to manage their portfolios.

However, the jury is still out as to whether or not these quantitative strategies guarantee returns.  Case in point – a recent Barclays report showed that while investors perceive quant strategies outperform those that are less technology-driven, there’s no research that would indicate that is actually the case.

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