Computer fund
Computer funds (also quantitative funds ) are investment funds whose stock selection is not determined by fund managers but by computers. The selection is based on purely technical-mathematical processes: a computer observes the investment universe on the basis of selected criteria and filters out the most promising securities from the multitude of values.
Depending on the program, the "digital fund manager" takes into account fundamental indicators such as balance sheet figures and the price / earnings ratio or technical factors such as trend indicators. The fund management usually takes over the decisions of the computer and only checks them for plausibility. Often the computer works completely automatically.
The advantage is that computerized systems can easily process large amounts of economic and company-specific information according to objective rules.
On the other hand, the commitment to programmatically determined investment strategies leads to a lack of flexibility to react to changing market situations.
While it has been empirically proven that index funds offer higher returns on average compared to actively managed funds, neither the superiority nor the inferiority of computer funds can be empirically measured within actively managed funds.
Footnotes
- ↑ Quantitative Funds . Retrieved February 16, 2015.
- ↑ www.welt.de: Computer funds suffer drastic slumps , August 14, 2007