“Black box” hedge funds profit in volatile markets

Reuters
August 25, 2011

Hedge funds run by sophisticated computer programs are profiting from large falls in stock markets and a rocketing gold price this month, even as funds managed by human beings struggle to cope with high market volatility.

Insiders say so-called managed futures funds, which try to latch onto market trends, are making money from declining bond yields and falling equities, as investors seek safe havens amid the eurozone debt crisis and after the U.S.’s credit rating downgrade.

These “black box” funds are up 4.2 percent so far this month, according to Hedge Fund Research’s HFRX index, while the average hedge fund is down 4.0 percent and managers betting on rising and falling stock prices have lost a hefty 7.3 percent on average.

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2 Responses to ““Black box” hedge funds profit in volatile markets”

  1. This is the case of man vs. machine. Who doesn’t know that the stock market is rigged? It’s the biggest casino in the world and it’s open 5 days a week. Middle class Americans and poor people don’t even realize how their getting raped by these large institutions managing their retirement money. These hedge funds don’t have your best interest at heart unless your one of their top clients. The government forced a lot of people who aren’t investors to become investors via their 401(k)’s, the sad thing is that most people can’t even tell you what companies their money is in, or who is managing it, besides for the company that is looting them. These people just tell’em to stay in their for the long run, it always goes up. Too bad for the people who want to ride out those market crashes only to get nowhere.

    To add insult to injury our government is printing all of that money created out of thin air so your losing your wealth through inflation. I wouldn’t be surprised if the market goes through another crash like we had back in 08-09 within the next few years. Especially being in this digital age where capital is moved with the stroke of a key. These hedge funds and mutual fund houses keep stiffing over their clients. I suppose they’ll just have to take it all before mainstream America wakes up and realizes that these guys are crooks. They see that mountain of 401(k) money and their just shaving it off, layer by layer.

  2. Black boxes … black holes … black drone helicopters … black outfits …

    P.S. Out to get ya !!!

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