Quant Hedge Funds Lose Money Using Computers, Shockingly Not Human Error
KEY POINTS
- ā¢Renaissance Technologiesā two largest funds each lost roughly 4% through January 9, 2026, amid early-year market turbulence.
- ā¢Schonfeldās quant-only strategy dropped 3.9% through January 16 while Engineers Gate posted about a 6% loss mid-month.
- ā¢Goldman Sachs and PivotalPath linked these losses largely to US stock volatility and crowding from Trump administration trade proposals.
In a financial plot twist that reads like a Silicon Valley cautionary tale, quant hedge funds Renaissance Technologies, Schonfeld, and Engineers Gate kicked off 2026 by collectively hemorrhaging millionsāRenaissanceās giant two funds each tanked about 4% by January 9, Schonfeldās quant-only ate 3.9% by January 16, and Engineers Gate stumbled a stunning 6% mid-month. This tech-powered stumble echoes the 'long, slow bleed' nightmare from summer 2025 and shows AIās algorithms couldn't outsmart Januaryās choppy US stock chaos fueled by Trump's trade drama and crowded bets. Goldman Sachs and PivotalPath report crowding risks signal that if your fund looks like a crowded subway, brace for bruises.
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When your math machines lose more than your high school savings account, maybe itās time to fire the bots and hire a psychic.
Quant funds in 2026 are like that kid in group projects who does nothing but still manages to drag everyone down.
Trading algorithms lost more in two weeks than I have in my whole life, and Iām just trying to buy avocado toast.
Source: Businessinsider | Published: 1/23/2026 | Author: Bradley Saacks,Alex Morrell
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