# Hedge Funds Use Textual Analysis for Investment Decisions Texts in 10-K filings shape hedge funds' positions. - **Source:** [Journal of Accounting Research](https://onlinelibrary.wiley.com/journal/1475679x) - **Published:** 2026-06-10 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/fab6b2ff-1990-4aa7-b902-06605dbfdbf1 ## Textual Analysis and Investment Strategies Hedge funds analyze 10-K filings on the SEC's EDGAR server to make investment decisions. These documents provide detailed insights into companies' financial health and risks. Funds use this information to optimize their portfolios. ## EDGAR Access Records The research examined hedge funds' access records on EDGAR to determine which files they downloaded. This data reveals which companies funds focus on and what information they prioritize. ## Textual Information and Position Adjustments Hedge funds adjust their positions based on textual information in the 10-K files they download. Risk factors and future projections play a critical role in their decision-making process. ## Generating Excess Returns Textual analysis helps hedge funds generate excess returns. Detailed report reviews enable funds to gain an edge over other market participants. ## The Importance of 10-K Filings 10-K filings are annual reports that provide detailed insights into companies' financial performance and strategies. These documents are a critical source of information for investors. ## The Future of Textual Analysis Textual analysis is becoming increasingly important in investment strategies. Hedge funds leverage this technology to gain a competitive advantage and better understand market trends. ## Sources covering this story - https://onlinelibrary.wiley.com/doi/10.1111/1475-679x.70074?af=R — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._