In the rapidly evolving landscape of asset management, integrating quantitative and qualitative skills has emerged as a pivotal trend shaping the industry’s future. Quantitative and qualitative approaches bring unique strengths to the table, and it’s increasingly evident that synthesising these skill sets is essential in achieving investment success. The days of large, traditional asset management teams are fading, making way for leaner, technology and data-driven investment approaches.
The symbiosis of quantitative and qualitative skills
Quantitative skills, enhanced with coding experience, involve analysing vast amounts of data, constructing models and using those insights to inform investment decisions. Advanced algorithms and machine learning models underpin quantitative approaches because they can efficiently process massive datasets, identify patterns and correlations that are more difficult for humans to do and minimise the human tendency to detect patterns that don’t exist.
On the other hand, qualitative skills help in holistically understanding broader economic trends, market sentiment and company fundamentals. Both approaches provide unique perspectives and the synergy between them offers a comprehensive view of investment opportunities.
The scrutiny of fees and the need for efficiency
Globally, investors are seeking cost-effective solutions without compromising on performance, which means the fees investment managers charge clients are under scrutiny, necessitating a leaner, more efficient operational structure.
Research shows that asset management firms are recognising the essential role data science and quantitative skills will play in this cost-conscious environment. They allow for more streamlined and efficient decision-making and operations, minimising costs and optimising returns to the benefit of end investors.
The Prescient approach
At Prescient Investment Management, we are ardent believers that the future of asset management requires integrating quantitative and qualitative skills. The synergy of these two skills enables us to make investment decisions that consider it all, resulting in greater financial certainty for our clients. That is why we are committed to systematic investing and have been leading the way for the past 25 years.
Our systematic approach to investing has three broad pillars:
AI and machine learning, advanced statistical analysis, and detailed portfolio construction and optimal portfolio formulation.
To deliver on the above, we have a dedicated in-house data science team that is an integral part of our investment process. We process over 120-million data points per day on our platform, allowing for enhanced analytics and creating operational efficiencies across the investment team.
Our investment process is deeply rooted in rationality, driven by rules and evidence, while also underpinned by a data-driven approach that reduces human biases and promotes factual analysis. This enhances our ability to navigate complex market dynamics and ensures consistency in clients’ long-term outperformance.
Research by S&P Global shows that few active equity funds outperform their benchmark over the longer term, while most fixed-income funds do. At Prescient, our systematic fixed-income investment approach allows us to generate consistent and reliable outperformance. Combined with Prescient’s derivative management expertise, we can generate enhanced passive returns in the equity space, offering a wide range of products across asset classes to fit the needs of our clients.
Our experience shows that integrating quantitative, data-driven analysis and qualitative insights is indispensable in achieving consistent, long-term outperformance by efficiently navigating evolving markets in uncertain times, optimising costs, and providing consistent value to our clients.
Prescient Investment Management Ltd, is an authorised financial services provider (FSP 612). Please note there are risks involved in buying or selling a financial product, and past performance of a financial product is not necessarily a guide to future performance. The value of financial products can increase as well as decrease over time, depending on the value of the underlying securities and market conditions. There is no guarantee in respect of capital or returns in a portfolio. The forecasts are based on reasonable assumptions and are not guaranteed to occur. Please note there are representatives acting under supervision. This document is for information purposes only and does not constitute or form part of any offer to issue or sell or any solicitation of any offer to subscribe for or purchase any investments. Opinions expressed in this document may be changed without notice at any time after publication. We therefore disclaim any liability for any loss, liability, damage (whether direct or consequential) or expense of any nature whatsoever which may be suffered as a result of, or which may be attributable directly or indirectly to the use of or reliance upon the information.