Whatever Happened to the “Twitter Fund”? #Twitter #Hedgefund

There has been a lot of buzz about the use of social media to inform trading and investment decisions in recent years, with some claiming that, if properly harnessed, big data from social media platforms could prove to be some kind of crystal ball for the markets.

Certainly, this was the thinking behind the ‘Absolute Return Fund’ – a $40.5 million hedge fund based solely on a strategy of using social media data to inform trades. The fund, which was started in late 2010 by London-based investment firm Derwent Capital Markets, based its investments on an analysis of 10% of the 10 million tweets that were then being sent on a daily basis on Twitter.

Using trading algorithms and sentiment analysis techniques to mine tradable data from the Twitter firehose, the fund returned an impressive 1.86% in its first month of trading, a result that beat both the market and the average hedge fund. Then, it abruptly shut down, citing a near-total lack of investor interest in what was then an innovative approach to trading.


Related Posts

  • 88
    Derwent Capital Markets, a London investment firm that has long been touting itself as the first social media-based hedge fund, has opened its doors. The £25 milllion ($40.5 milion) hedge fund is basing investments on an analysis of 10% of the 10 million tweets sent daily. The firm applies trading algorithms and…
    Tags: firm, social, fund, analysis, hedge, investment, tweets, derwent, $, market
  • 69
    The hedge fund industry used to have humble beginnings: in 1990, it had $40 billion in assets under management. Now, its growing appeal has led to a staggering $2.6 trillion in 2013. In retrospect with the mutual funds industry and the global financial markets, this is a small figure. However,…
    Tags: hedge, fund, trading
  • 69
    What is a Hedge Fund?  A hedge fund is an aggressively managed investment fund that is maintained by a professional management firm. Hedge funds are typically a portfolio of investments that makes use of advanced and complex investment strategies like short and long positions, leveraged positions, arbitrage, and derivative positions…
    Tags: hedge, fund, investment, trading
  • 65
    Czech Republic wants a piece of the rising hedge fund industry, after a new EU regulation named AIFMD (Alternative Investment Fund Manager Directive)  takes effect in July. Previously the highest number of hedge funds, after the U.S., are domiciled in Luxembourg, a tiny EU state. But the new EU rules, which…
    Tags: hedge, fund, investment, trading
  • 60
    Commodity Futures Trading Commission data show the most-bullish six-week change to Aussie positions in more than 1 1/2 years over the period to April 22, just in time to catch a slump that made the local dollar the past week’s worst performer among 10 currencies tracked by Bloomberg Correlation Weighted…
    Tags: result, market, years, trading, data, hedge