AI-Powered Hedge Funds VastlyOutperformed, Research Shows
Published: INSTITUTIONAL INVESTOR
Date: August 04, 2020
Author: Christine Idzelis
Hedge funds using artificial intelligence returned almost triple the global industry average, Cerulli found.
Hedge funds with artificial intelligence capabilities showed a huge competitive edge over investors that didn’t use AI, new research indicates.
AI-led hedge funds produced cumulative returns of 34 percent in the three years through May, a report Tuesday from consulting and research firm Cerulli shows. That compares with a 12 percent gain for the global hedge fund industry over the same period.
“There has long been suspicion of the ability of AI to react to unexpected events, such as the coronavirus pandemic,” said Justina Deveikyte, associate director of European institutional research at Cerulli, in a statement Tuesday. “But there is now a sense that the technology has advanced to the point where it is better able to adapt to unforeseen scenarios via the ever-growing amount of market data available.”