Systematic investing relies on quantitative models and rules-based decision making instead of subjective human judgment. Unlike traditional approaches that may be influenced by emotions and biases, systematic strategies follow disciplined processes based on empirical evidence and statistical analysis. This elimination of biases ensures consistent execution, often resulting in superior risk-adjusted returns over time.

Factor investing targets specific attributes of companies that have historically proven to be drivers of returns. These include value, momentum, quality, size, low volatility, etc. Factors work because they either harness certain risk premia or exploit persistent market anomalies arising from behavioural biases and/or structural constraints. Our multi-factor approach combines several factors to create a more robust strategy that can perform across different market environments.

Our risk management approach is multi-layered:

• Multi-model, multi-factor diversification — We diversify across multiple factors that perform differently in various market environments to reduce correlation risk. Additionally, we don’t rely on a single model or “alpha” but rather follow an ensemble approach of multiple models to harness a wider array of dislocations.
• Position sizing controls — We apply strict position sizing limits to prevent concentration risk at stock as well as sector levels and maintain portfolio balance.
• Dynamic exposure management — We implement real-time exposure adjustments based on changing market conditions to optimize risk-return profiles.