If movies like "2001: A Space Odyssey" and "The Matrix" are any indication, humans are not comfortable with the idea of artificial intelligence controlling their fate, so why ever trust a computer model to run your investments? Because, in the real world, it seems to pay off. Many mutual funds that make their trades based on the recommendations of a proprietary computer model, known as quantitative or quant funds, have outperformed their benchmarks in the last three years. And investors have noticed. At the Vanguard Group, which created its first such fund in 1985, the amount of money managed by its quantitative group has quintupled in the last three years, to $20 billion at the end of 2005 from $4 billion in 2002.
New York Times