Pretty interesting - some of the best quants got crushed this year, not just relatively but are down a good amount. Conversely, the traditional fundamental guys knocked it out of the park. This was surprising to me as quant funds seem like all the rage and there is a constant chatter of quants being the death of fundamental...yet in times in market volatility, at least for now, this hasn't shown to hold true. It's something that fundamental guys have been saying for years...of course quants will do well in a bull market, but what about in times on volatility ...well now we know. I'm sure they will continue to adapt and improve for but for the time being, the war has not been won and fundamental smucks like myself will live to see another day.
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It's a good reality check at a time when everyone is trying to be a quant. These funds became successful not by simply being quant, but by seeing and doing things others were not doing at the time. Now that everyone is trying to copy them, it no longer works so well.
Also, these huge quant funds have grown too big in terms of AUM, and their business model has become like a huge asset manager with higher fees. The LP clients are not paying for alpha anymore, they are paying for exposure to a process run by the biggest names in the industry so they can keep their own jobs. Many quant funds that have kept their AUM down have actually done very well this year (in fact Rentec's own Medallion is up by 60%+).
I put very little stock in these sorts of articles - they pop up every other week and I rate them pretty much as clickbait. The best quant funds don't post their returns publicly and try to avoid publicity, for good reason. Medallion, TGS, PDT, or the flagship stat arb funds for Two Sigma and D.E. Shaw, are all conspicuously missing from any hedge fund returns list you might find. And besides Medallion, good luck finding any of their returns at all. These are just the more "known" ones, there are many others that consistently post amazing returns on good AUM.
As a result, there's a strong selection bias in the observable returns for quant funds: the ones that do publicly announce returns on BB tend to be large, high capacity, beta offering funds trying to attract investors to make the management fee. Not that there's anything wrong with this - they don't market themselves as anything else and people investing into them tend to know what they're getting, but it's just a different business model and can't really be compared in the same way.
Articles like these are more entertainment/gossips than real news or analysis. For starter, investors do not look at return alone to decide if a fund is performing and certainly not return over a single year. It is much more nuanced than that.
Having said that, the quant space does have issues. The industry is overcrowded with posers that are selling betas, risk premia instead of alphas after the hype train started post GFC. Way overdue for a clean-up imho.