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Finance a la shmoop. What is a quant fund?

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Oooo, algorithms.... Say it with me people algorithm, math, black boxes, spooky [Equations flying around]

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numbers a quant fund is an investment fund

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well usually hedged or with elements of hedging that relies solely on the math [Definition of a quant fund]

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of everything. They don't care much that toothpaste is now being used for crow's [Man putting toothpaste of his face]

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feet abatement and that there's a five-year bullish trend for Colgate they

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don't care that Tesla is dominating the world with electric cars and that [Tesla logos popping up all over the world]

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gasoline will likely be obsolete in a few decades and they don't care that

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people are living longer so life insurance companies have a tailwind [Life insurance sail boat going fast]

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behind them too because insurees will be paying those premiums 17 more months

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on average in the future before they croak. Well all quant funds care about is [People handing over money before they disappear]

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the math of the math, typically a quant fund builds its own proprietary complex

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math laden models which automatically trigger a series of trades at any given [Equations flying around]

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moment in the trading day hoping to benefit even in tiny ways from what are

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essentially arbitrage opportunities or theoretically riskless trades that can [Definition of arbitrage]

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be made taking advantage of mixed pricing in the market all around the

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world. Quant funds as they are now classified as an alternative investment

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in the same vein as hedge funds charge the same exorbitant fee structure and [High fee structure label on quant funds]

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because they do such vast volumes of trading that is something like one-third [Stocks being moved around]

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of all u.s. stock trades now derive from quant fund managers well they give out

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massive commissions and have equally massive sway with the brokerage

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community to you know say nice things about them and encourage people to talk [Newspaper article about quant funds]

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about how great quant funds are yeah and you've probably seen myriad ads on TV [Woman watching TV]

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for their funds you know like this one math it does a body good.. [Dwayne Johnson on the advert]

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