What are the disadvantages of quantitative funds?

Among the main ways of fund investment management, the purpose of quantifying funds is to obtain market premiums through different financial products, which is a mode of earning spreads by using the same product. With the continuous development of the Internet, quantitative trading has attracted more and more attention. In the market of trading and investment such as stocks and funds, quantitative funds are gradually welcomed by everyone.

What are the disadvantages of quantitative funds?

The resilience of quantitative fund is not strong, and the structural similarity of quantitative fund model will directly affect the effectiveness and liquidity of the model. If the market changes suddenly, it will take some time for the quantitative fund to optimize the adjustment algorithm. The quantitative model is based on historical data, so its ability to absorb new information is relatively slow.

Moreover, there is no way to pursue high returns after adopting quantitative funds, which often focus on long-term performance. In other words, if the investor's goal is to pursue short-term gains, quantitative funds cannot achieve this goal. In addition, once the external environment changes or some major events occur, if the fundamentals change, its effectiveness is likely to be affected.

Advantages of quantitative funds:

It helps to avoid blind spots and control risks.

Quantitative fund is based on the analysis of a large number of historical data, considering all kinds of investment methods comprehensively, and then making the investment decision of the investment model suitable for the current market with the help of computer and data analysis.

In fact, its core is to control the risk through quantitative investment strategy, and cooperate with active investment strategy to obtain the excess return of the market under the controllable risk.

In addition, quantitative funds break through the limitations of traditional and indexed investment, and can also become fixed-income fund products when the market is not good.

Summary: Quantitative fund is a form of investment and a deeper analysis behavior. Compared with traditional qualitative analysis, it has the characteristics of rationality and efficiency. However, it cannot be ignored that fund managers in enterprises must pay attention not to rely too much on quantitative investment in the investment process, and need to make accurate judgments based on their own experience and the form of domestic economic market.