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Aaron Brown

Wall Street Quant Strategies Have Proved Their Worth

Some 30 months of strong performance is enough to declare the long quantitative investing winter over.

It’s spring time for Wall Street’s quant traders. 

It’s spring time for Wall Street’s quant traders. 

Photographer: Dan Kitwood/Getty Images

The period from 2017 to 2019 was a quantitative “winter” that discouraged many investors. But the thaw beginning about six months before the pandemic, along with good performance of late, is reawakening interest. The question is whether strong Covid-era performance tells us anything about quantitative strategies that we didn’t know in 2019?

Older investors may remember the spectacular quant runs after previous crises like the “Nasdive” of 2000 when the dot-com bubble burst and the global financial crisis of 2007 to 2009. Dispassionate models based on a century or more of data and multiple asset classes and regions have an emotional appeal during uncertain times and when forecasters disagree. The case for quant investing is based on long-term history and stable allocations.