A brief flash crash on Monday saw markets wipe out their entire January gains, but one hedge fund came out ahead.
The Dow Jones industrial average plunged nearly 1,600 while the S&P 500 Indexsank 4.1 percent to wipe out its January gains and turned lower on the year. An attributing factor to the flash crash was autonomous computer driven trading strategies that were geared to the low volatility seen over the recent year.
Trading volume was almost double the 30-day average. As expected, the Japanese Nikkei fell 4.73% on Tuesday’s market close at 21,610.24.
However, an Australia-based quantamental and behavioral science focused hedge fund that specializes in global equities called Goldsky Asset Management rose 0.34% overnight.
Goldsky founder and President, Ken Grace, commented,
The Goldsky strategy once again demonstrated its robustness as volatility returns to global markets, and shows the dangers of computer-driven strategies trading autonomously without human intervention and oversight. Our long positions were protected by our option protection and our short positions gained significantly as markets fell.
CNBC’s Jim Cramer said in his program Mad Money, “The market got phony again. It’s a shame. It can’t handle the volume and it can’t handle this level of selling. And the market just broke again. We haven’t seen it break in a long time.”
Grace added that while Goldsky puts its trust in their “computers to assist” them in analyzing data, they do not trust machines to trade on their behalf.
“It is my pleasure to report this positive result to Goldsky’s investors,” Grace said, as the hedge fund maintained its winning streak. Goldsky’s Global alpha Fund capped 2017 with 24.22% returns, outperforming its benchmarks as the MSCI World Indexrose 14.75% in 2017 and the S&P 500 jumped 21.78%.
CONTACT GOLDSKY ASSET MANAGEMENT ( AUSTRALIA )
Goldsky Asset Management ( Australia ) PTY LTD
Level 29, Chifley Tower, 2 Chifley Square, Sydney, NSW 2000, Australia.
T16/17 Bells Boulevard, Salt village Kingscliff, NSW, 2487, Australia
Victor Popov, Business Development Manager
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