Quant Fund Distortions

http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/MarketHackersRunningOutOfAmmo.aspx
Interesting article about the distortions in the market that seemed to be created by quant funds. This type of stuff allows me to make a living.

Below is the meat of the article.

At a recent New York conference, investor Jim Chanos noted a couple of anomalies that, in all likelihood, are a direct function of quant trading. They highlight a disconnect between stocks and their underlying fundamentals that only a computer could love.

It turns out there are two -- and for all I know, more -- closed-end mutual funds that own mundane large-cap S&P-oriented stocks: the Cornerstone Total Return Fund and the Cornerstone Strategic Value Fund. Inexplicably, these funds trade at premiums of better than 50% to net asset value. At one point this year, they traded at premiums far higher.

The connection to the quant universe is that Renaissance Technologies, among the biggest quant hedge funds and certainly a very successful one, is the fourth-largest shareholder in both Cornerstone funds.