In our most recent edition of Preqin Hedge Fund Spotlight, our lead article took a closer look at discretionary and systematic funds to see who is performing better – man or machine? The article reveals a nuanced picture; systematic trading funds - those that rely on quantitative models to make sense of data signals to make investment decisions, are outperforming discretionary hedge funds – funds in which humans make trading decisions – in 2016 YTD. However, when looking at the returns by strategy of the fund, the study reveals that some funds which use manager discretion to make trading decisions outperform their systematic counterparts; notably relative value strategies and equity strategies. In contrast systematic CTAs, macro strategies and multi-strategy funds tend to outperform their discretionary peers.
Leading on from the Hedge Fund Spotlight article we reveal the leading discretionary and systematic funds in 2016 YTD using data taken from performance league tables on Preqin Hedge Fund Online. Nine of the top ten leading performing discretionary funds in 2016 YTD pursue equity strategies; in contrast more than half (six) of the top ten performing systematic funds pursue a macro or CTA strategy.