From Dealroom · · 50s
AI Funds Outperform Traditional Hedge Funds
AI-driven hedge funds outperformed traditional funds by 6% annually until 2017, but the gap narrowed over time.
In brief
AI-driven hedge funds outperformed traditional funds by 6% annually until 2017, but the gap narrowed over time. AI funds initially outperformed non-AI hedge funds by 6% annually but the advantage disappeared after 2017. Originally reported by Dealroom.
Research Methodology
A 2026 National Bureau of Economic Research working paper analyzes 7,896 US hedge funds from 2006 to 2024.
AI Fund Classification
The study identifies 89 AI funds, 1.1% of the sample, using text-based classification from 2006 to 2024.
Performance Trends
AI funds outperformed non-AI hedge funds by 6% annually until 2017, after which the gap became statistically insignificant.
Long-Term Impact
Even AI funds launched early saw their relative outperformance disappear after 2017, with no lasting advantage.
The takeaway
AI funds initially outperformed non-AI hedge funds by 6% annually but the advantage disappeared after 2017.
