A subset of Category III AIFs, HFT Funds rely on speed. They use powerful computers and algorithms to transact in milliseconds, profiting from tiny price discrepancies across exchanges.
This is a pure ‘quant’ strategy. It doesn’t care about the company’s fundamentals; it cares about market microstructure and order flow. While volatile, HFT funds can generate returns that are totally uncorrelated with the broader economy, acting as a unique diversifier for a sophisticated portfolio.
