Quantitative investment managers suffered a net outflow of $9.3bn in the third quarter last year as they fled the financial sector in favour of IT and materials stocks. The activities of quant funds, which use statistical models designed to identify patterns in financial markets, are increasingly important because they account for such huge trading volumes. Tabb Group, the US consultancy, predicts that by next year, algorithmic trading, one aspect of quant-investing, will account for half of all US equity trading. But “quants” have endured a torrid few years. A survey from Thomson Reuters, to be published Tuesday, shows that $3bn of the $9.3bn Q3 net outflow was accounted for by the reduction of funds held in the financial sector.

This entry was posted by Gwen Robinson on Tuesday, February 10th, 2009 at 5:34 and is filed under Capital markets, Hedge funds. Edit this entry.