Machine Learning’s Mediocre Gains

Like hedge funds, AI strategies have struggled to beat the stock market

Graphic by Bloomberg Businessweek, sources: Eurekahedge, Hedge Fund Research, Inc., Bloomberg

Notes: 2017 returns YTD through May; S&P 500 Index returns are with dividend reinvested 

Hedge funds using vast amounts of data, computing power, and machine-learning techniques to make money are drawing investors’ attention. But their brief track records show they suffer the same shortcomings as their more traditional peers. The Eurekahedge AI Hedge Fund Index, which tracks 12 of these money pools, has outperformed hedge fund peers since 2013 but failed to beat the S&P 500 Index.

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