Artificial intelligence coupled with unique market conditions seems to be a recipe for strong investment gains for one niche hedge fund strategy that is still on track for its best annual performance.
After citing performance of 37% for the year to date through August, Munich-based hedge fund firm Quantumrock seemed poised for strong double-digit performance through the end of the year via its artificial intelligence driven strategy.
The firm reported that its flagship strategy Volatility Special Opportunities Program closed November up over 4% with returns of 30.66% so far in 2020. The strategy had its biggest drawdown for the year in October with losses of -6.47%.
“What was touted in many 2020 outlooks as the big event of the year, the US election passed without upsetting the markets too much as they awaited the news that Joe Biden is to be the next president,” said Quantumrock CIO Michael Zellner. “Meanwhile, an end to the Covid-19 crisis is now in sight with the first three vaccines are ready to be deployed. The path to recovery, however, may still be bumpy over the coming quarters as governments grapple to control the virus during the winter months.”
VSOP is a systematic multi-strategy that is made up of a balanced portfolio made up of S&P 500 futures and U.S. treasuries with a duration risk of five years. It also trades overlay strategies based on situational volatility patterns as a tail risk hedge.