* “Quant” investing

What is quantitative or “quant” investing? In short, it is where mathematical models rather than manager’s discretion make investment decisions.

What do quant managers do apart from running sophisticated computer programs? An analogy with cars may help here. No matter how sophisticated a car, it still needs a driver and sometimes a mechanic. The driver must know when to brake and when to accelerate. Quant managers provide both functions – they control risks as well as fix things such as data errors when they occur. Most importantly, every car needs to be designed and engineered in the first place – the most important part of a quant manager’s job.

In the case of a good quant, it should get better!” Ignore established and successful quants at your peril. However, behind any computer program there is always a human brain. Investing in a quant approach is the best way to profit from human ingenuity but without the danger of human error.

Detail: Why quant?