We started the investing year with the perception being rammed down our throats that robots were about to take us over. Value Investing was going to be a thing of the past. The industry was being conned into thinking that AI would exceed human performance. We (#notme) rushed for the ETF and quant BUY model button to invest in strategies that didn’t rely on humans. ETFs particularly saw heavy inflows and every post on LinkedIn was about how good AI was.
Sadly, they haven’t done as well as expected this year. Two Sigma Investments’ flagship Compass fund is down 2.5% this year to May 31, according to investors. That compares with positive returns in 2016 (10.33%) and 2015 (15%). AHL Dimension, a $5.2bn fund that is the biggest managed by Man AHL – part of London-based Man Group – is up just 2.2% this year through June 9, after a 1.5% drop last year. Winton Group’s $10.5bn Winton Futures Fund was up just 1.4% through June 7. It fell 3% last year and gained less than 1% in 2015.
Some of the winners? Value investing.