9HedgeCo.Net) October has not been kind to systematic (quantitative / model-driven) hedge fund strategies. According to a client note from Goldman Sachs, systematic funds have posted daily losses every day since October 1. Reuters
These losses are often attributed to crowded trades and overlapping exposures. When many quant funds hold similar momentum or signal-driven positions, a market reversal or shock can trigger simultaneous selling, eroding gains rapidly. Reuters

Yet, despite the rough start to the month, many quant funds remain up ~11.3% year-to-date. Reuters The performance divergence underscores the tension in quant strategies: in trending regimes, alpha can be generated strongly, but when signals reverse or correlations shift, the downside is steep.

Compounding the pressure is growing skepticism about the sustainability of returns from purely model-based strategies. Some industry insiders question whether quant alphas are now largely arbitraged away, given how many funds rely on similar datasets and factor regimes.

Still, quant strategies continue to evolve. Increasingly, funds are layering in regime detection, volatility filtering, or adaptive weighting to avoid overexposure to crowded factor bets. As markets remain unpredictable, the ability to dynamically modulate exposure may be the difference between lagging and outperformance in the systematic space.