QMA Factors in Experience to Factor Out Noise

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  • 03 mins 12 secs
In a market crowded with quants, QMA’s 40+ year track record as a leader in the search for long-term alpha stands apart. A pioneer in quant investing, QMA takes a dynamic investment approach based on fundamental insights. Seeking to reduce unintended risks, QMA brings time-tested judgment earned from decades of managing through various market cycles.

With over $125 billion managed across global multi-asset, equity and indexing solutions, QMA is backed by PGIM, one of the world’s leading asset managers. Filtering out short-term noise helps QMA achieve pure exposures to long-term alpha opportunities.

Channel

PGIM
Stacie: As a pioneer in quant, we've learned you don't get to be a leader by following the crowd.

Andrew: There's an unbelievable amount of data out there and there are many, many false signals.

Stacie: It's hot, it's sexy, everyone thinks it works and so there tends to be a crowding there.

Andrew: The real challenge is actually in rejecting all of those false signals and that really requires judgment and wisdom.

Ed: At QMA, we try to build enduring value. But part of that enduring value means it has to be different from what other people are doing. We always have to stay one step ahead of the crowd.

Stacie: The best way to achieve consistent and enduring alpha is to use a systematic approach.

Ed: Identify sources of alpha that maybe other people haven't recognized yet, if we're going to be able to consistently add alpha over time.

Andrew: Whatever signals we use have some sort of underlying rationale, whether it's academic, economic or behavioral.

Stacie: For a new factor to get into our model it has a lot of hurdles it has to go through, including having us understand why it works.

Ron: I view myself sometimes as being our Chief Paranoid Officer. To basically make sure that we're not missing something, but at the same time deliver the best returns possible.

Andrew:Every part of our process has been put together in a way to maximize the likelihood of that risk turning into return.

Stacie: We use a proprietary risk model. It's looking to get as much information as possible, but mitigate any unintended risks.

Andrew: This is where I think QMA is in an exceptionally good place. We've been managing money for over 40 years. Through different environments and difficult environments.

Ed: Especially in running multi-asset portfolios designed to add value on top of a benchmark.

Stacie: We have one of the longest, quantitative equity track records in the industry. Andrew: Exceptional track records of not only out performance, but also very, very efficient conversion of risk into return.

Stacie: And that's where experience as a team really comes in. Andrew: QMA is genuinely a pioneer in the quantitative investing space.

Ed: We've been doing this for forty years, most others have not.

Stacie: The original architects of our stock selection strategy are still with the firm. We have 21 PhDs here at QMA.

Ed: If you want to keep up with your colleagues, you've got to bring your "A game."

Stacie: We're coming at a problem from all different angles.

Roy: There's always going to be noise in the markets. Having the conviction in what we're doing and discipline within our research, within our portfolio management, and within the way we execute on our strategy is something that QMA has always delivered.

Andrew: Every single thing we do is designed to maximize the consistency we can deliver to our clients.

Stacie: Years from now, QMA is still going to be true to our underlying philosophy. We are a long-term alpha seeker.

Ed: We have the people. We have the culture. Stacie: We know when to stay the course, and we know when to go into a new direction.

Ed: We have to do what we've done for forty years-add value for clients.