By Bruno Taillardat, Head of Quant Investing at Edmond de Rothschild AM
Quantitative investing, sometimes referred to as systematic investing, has recently gained popularity and is actively sought after by many investors looking for stable performance and rigorous risk management. However, this type of investment is often seen as mechanical or opaque. In our view, quantitative investing provides a rigorous and transparent framework for structuring our investment convictions, combining systematic portfolio construction with the supervision of experienced portfolio managers to navigate increasingly complex equity markets.
Executive summary
— At Edmond de Rothschild, we define quantitative investment as a clear and transparent investment approach based on economic and financial indicators.
— We use quantitative investing to help give structure to our investment convictions. Our process is fully systematic, but not fully automated: human oversight remains essential at every stage.
— Data and models bring consistency, transparency, and robustness to portfolio construction, giving us the flexibility we need to respond to evolving market conditions.
— For us, quantitative investing is a natural extension of our long-standing investment philosophy, which emphasises long-term conviction and optimal management of market risks.
— Quant investing is particularly pertinent in today’s equity markets, where structural concentration, rapid regime shifts and increasing complexity shape market behaviour. In such conditions, disciplined, diversified and data-driven strategies become increasingly valuable.
— Our quantitative investing capability helps investors use their risk budgets more effectively, whether it is aimed at controlling absolute risk (volatility) or relative risk (tracking error), rather than maximising short-term returns at any cost. This sits within a clear investment process that investors can understand and monitor over time.