Until not too long ago, quantitative investing used to be the preserve of arcane hedge funds. No more Conventional institutional investors and so-called fundamental funds, too, are now harnessing quantitative techniques and tools to make portfolio and trading decisions.

Also known as systematic investing, quant investing involves the usage of tools such as advanced statistical and mathematical modelling, machine learning, computer systems and factor investing to estimate the optimal probability of undertaking a profitable trade.Among other benefits, quant trading enforces discipline in investing, since it is bereft of human emotion – whether greed or fear – and is driven by computer models built around pre- defined rules.

Moreover, quant investing capitalizes on irrational decision making in financial markets, read mispricing of securities, and also can be scaled and diversified quickly to cover multiple sectors, regions and countries.

  • Event-driven arbitrage
  • Systematic global macro
  • Risk parity
  • Statistical arbitrage
  • Managed futures / Commodity trading advisors (CTAs)