Quantitative investing is a simpler concept than its multi-syllabic name implies. At root, it is about looking for patterns in data to understand what investments have worked before, in order to anticipate what might work again.
For the stock screens that appear in this publication, this data is often company-specific, involving a combination of quantitative factors (such as liabilities, profit margins and sales growth) and ratios (such as price/earnings multiples or free cash flow yields).
But this isn’t the only data-driven approach. This week’s screen, for example, uses a methodology designed to take a momentum-like approach to investment style. By following whatever approach is working in the market – be it growth, value, quality or momentum – our Strategy screen seeks to mix sentiment with the cheapest, fastest-growing, highest quality or fastest-rising stocks at any given moment (or in practice, each time it is refreshed).