Here is Medallion’s return through Sept this year according to Greg Zuckerman
I’m not doing better than his private, for employees only, fund.
But I’m certainly doing better than his other funds that are open to the public:
“However, Renaissance’s other three funds are available to outside investors. The biggest of these, the Renaissance Institutional Equities Fund, isn’t doing as well as its more lucrative private counterpart; the fund lost 20% of its value in 2020, and was down a further 4.36% at the beginning of the year. Since then it has recovered somewhat, and is now up a full 4% for the year so far.”
https://financhill.com/blog/investing/can-i-invest-in-the-medallion-fund
And overall 4.3% annualized since inception (2001) !!!
https://www.renaissanceinvestments.ca/products/869
Seems wrong no? Couldn’t he try a little harder for the public?
Say what you will about Buffett but he has done a lot more good for a lot more people than Simons.
Marco,
Based on my understanding, Medallion and Renaissance Technologies outside funds are run based on different strategies. “Medallion has short-term holding periods, RIEF and the other funds search for longer-term aberrations and own smaller stocks and other investments — things Medallion shies away from.”
According to fund documents, the Medallion fund employs a short-term, quantitative trading strategy across multiple asset classes. These include global equities, futures, commodities, and currencies. It also tends to have high turnover and significant leverage. The Renaissance Institutional Equities Fund, by comparison, only trades in equities, and holds stocks for long periods of time, according to fund’s registration document.
The Renaissance Institutional Diversified Alpha fund, meanwhile, trades equities, derivatives, and various instruments in the global futures and forwards markets, according to fund documents. Like REIF, the RIDA fund holds significant individual positions, usually for long periods of time.
The Renaissance Institutional Diversified Global Equities Funds, which trades equities and derivatives. The RIDGE fund seeks to be market neutral by maintaining low levels of beta, or exposure to the broader market.
Interesting enough, Numerai is just starting a new market neutral hedge fund based on their meta models from “designer models” submitted by their users. Here is the link.
I hope P123 can achieve a similar level of success with new “designer models” from users based on the upcoming new AI rollout.
Regards
James
Numerai fund’s 20% total return from Sep-2019 to Sep-2021 is not so great. The plot shows end-of-month values - conveniently not showing value on March 20, 2020 when the market reached its recent low.
Let’s not waste time on Medallion. I’ve been in their offices, met with top brass. You cannot compare this to them - it’s literally all stars vs the bush league.
In terms of RIEF – lots of rumors flying since they started. Their goal to was to manage what they consider “Large sums of capital” for investors." They are on record claiming that as over $100bn - and not designed to be a tracking fund. I welcome anyone to try to manage that amount successfully.
I’m not denying claims against them but I think jealously leads to dangerous conclusions - and this may be happening here.
If we want to compete, we need intra-day data, unique datasets, faster fundamental updates, and better mathematical models (covariance models, etc.).
Georg,
I think the numerai hedge fund is designed to be a market neutral fund with target 0% beta and country/sector/industry neutral and very low factor exposure.
With that kind of risk level and a 5X leverage gross exposure (0% net exposure), I think their return is quite impressive especially comparing to other market neutral funds in the market.
Regards
James
Jim,
I have already sent this comparison to you via email but no sure if you got it.
The three outside funds offered by both firms underperform S&P 500 in the past 5 years. It seems that Medallion managed by Renaissance Technologies is the only exception here. Due to the shorter term nature of Medallion, it also means that longer term anomalies are harder to profit from — The Medallion Fund trades mostly short term anomalies, and leave the longer term strategies for the funds they open to outsiders. (Based on the zero commission offered by brokers today, it is wise to stick with daily rebalancing).
Regards
James
James, Thank you for posting this. VERY interesting. -Jim