Qualitative analysis requires more work, more resources (ie people) and the cost of that is inevitably passed to the investor. Quant meanwhile, relies on computer support and mathematical models, such that analysis requires monitoring, not investigation and ‘insight’. Nor does it require too many people. It can be delivered significantly cheaper.
For most clients, I would argue reasonably-priced attempts to obtain the ‘sure money’ are preferable to expensive long-shots at ‘the big money’. A quant asset allocation strategy using low-cost passive investments is a sensible core of an investment portfolio.
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Bill Vasilieff is managing director of Novia
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