Strategic Investment Group

Why We Use Quantitative Strategies

September 2010

Since our founding, Strategic has always used a large helping of quantitative strategies in our manager mix, particularly in the U.S. equity portfolio. We plan to continue to do so, despite quants’ well publicized setbacks, as we believe that quants are better equipped than many traditional active managers to perform in today’s hyper competitive markets. Over the long term, capital markets have been trending toward increased rationality and market efficiency. However, there is, we believe, a continuing opportunity to exploit an irreducible level of inefficiency created by a behavioral investor bias that rewards investment tilts toward value and momentum. In this ever demanding competition for value added, quants offer superior portfolio construction, more focused alpha production, tighter risk controls, lower costs, and customization.

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