Urban Investor’s Dictionary: Quant Funds

The biggest and fasting growing trend in investing is the increasing use of Quant (Quantitive) Funds. As it stands somewhere between 16-25% of current trade volume is made up of quant funds. Quant funds are a product of the growing trend of quantitive analysis. The same technology that is defeating world class chess champions, and propelling self driven cars is slow becoming a dominant force in the financial world as well.


Quantitive analysis is a form of analysis based on mathematical measurements, calculations, statistical modeling and research. It’s aim is to use the data and the statistics to gain an objective understanding and predictably to the behavior of events, markets, companies, financial instruments, etc. Computer based models are designed and then used to determine the attractiveness of an investment.

The early progenitors of quantitive analysis and quant funds are often referred to as “quants” themselves. Even with their growing popularity quantitive funds still face skepticism. No one really understands how their algorithms work and thus the process is sometimes referred to as “Black Box”. Not all investors are fond of the mystery behind quant funds.

Conversely actively managed quant funds are beginning to consistently outperform their counterparts. With a data driven, testable, and easily reviewable as to the errors approach, quant funds are attracting more and more investor dollars.This in turn leads to more development of the technology and methodology behind quantitive analysis, hence making it more effective and attracting eve more investor dollars.

Late 19th – early 20th century French mathematician Louis Bachelier is credited as the early pioneer for quant analysis and funds. In his Ph.D. thesis titled “The Theory of Speculation” Bachlier makes use of statistical analysis to study and understand stock price fluctuations. As with most pioneering genius, Bachelier’s ideas were initially met with skepticism and scrutiny. Decades later his work would be properly recognized.

The financial crash in the 1930’s led two Columbia professors – Benjamin Graham and David Dodd to publish a book titled “Security Analysis”. The placed an impetus on developing a new investing strategy that was more disciplined in its framework. This approach focused on the analyzing a company’s financial statements and comparing it’s market value against it’s intrinsic value. It would lay the foundation for what is now know as “value investing”. As the technology developed with the theory, more investors and academia jumped on board.

The earliest versions of activity managed quant funds were developed and launched in the first half of the 1980’s. Since then software has rapidly evolved to suit the purposes of gathering, analysis, and making predictions based on the data. Ahead of the 2008 market crash, quant funds began to exhibit strange behavior. As if they had predicted the crash a year before it happened, quantitive funds across the board began entering into sell positions. While some viewed this as erratic behavior and felt cause for concern, others saw the true potential in the quantitive analysis process, and since then quant funds have more than tripled in market share.

string(3293) "

The biggest and fasting growing trend in investing is the increasing use of Quant (Quantitive) Funds. As it stands somewhere between 16-25% of current trade volume is made up of quant funds. Quant funds are a product of the growing trend of quantitive analysis. The same technology that is defeating world class chess champions, and propelling self driven cars is slow becoming a dominant force in the financial world as well.


Quantitive analysis is a form of analysis based on mathematical measurements, calculations, statistical modeling and research. It's aim is to use the data and the statistics to gain an objective understanding and predictably to the behavior of events, markets, companies, financial instruments, etc. Computer based models are designed and then used to determine the attractiveness of an investment.

The early progenitors of quantitive analysis and quant funds are often referred to as "quants" themselves. Even with their growing popularity quantitive funds still face skepticism. No one really understands how their algorithms work and thus the process is sometimes referred to as "Black Box". Not all investors are fond of the mystery behind quant funds.

Conversely actively managed quant funds are beginning to consistently outperform their counterparts. With a data driven, testable, and easily reviewable as to the errors approach, quant funds are attracting more and more investor dollars.This in turn leads to more development of the technology and methodology behind quantitive analysis, hence making it more effective and attracting eve more investor dollars.

Late 19th - early 20th century French mathematician Louis Bachelier is credited as the early pioneer for quant analysis and funds. In his Ph.D. thesis titled "The Theory of Speculation" Bachlier makes use of statistical analysis to study and understand stock price fluctuations. As with most pioneering genius, Bachelier's ideas were initially met with skepticism and scrutiny. Decades later his work would be properly recognized.

The financial crash in the 1930's led two Columbia professors - Benjamin Graham and David Dodd to publish a book titled "Security Analysis". The placed an impetus on developing a new investing strategy that was more disciplined in its framework. This approach focused on the analyzing a company's financial statements and comparing it's market value against it's intrinsic value. It would lay the foundation for what is now know as "value investing". As the technology developed with the theory, more investors and academia jumped on board.

The earliest versions of activity managed quant funds were developed and launched in the first half of the 1980's. Since then software has rapidly evolved to suit the purposes of gathering, analysis, and making predictions based on the data. Ahead of the 2008 market crash, quant funds began to exhibit strange behavior. As if they had predicted the crash a year before it happened, quantitive funds across the board began entering into sell positions. While some viewed this as erratic behavior and felt cause for concern, others saw the true potential in the quantitive analysis process, and since then quant funds have more than tripled in market share.

"

The Motherhood Penalty

Photo by Sai De Silva (Unsplash)

You Lose $20K Each Year Just For Being a Mom You may not know this, but there was a time when smoking was considered “liberated” behavior for women. There was a cigarette company Virginia Slims that was created specifically to attract female smokers during the bad old 1970s. The slogan was “You’ve come a long

What Is Kris Jenner’s Net Worth? 

Kris Jenner

The Momager May Be Worth More Than You Think… Kris Jenner is a pop culture icon for many reasons. While you may have watched her meteoric rise to fame on Keeping Up with the Kardashians — which originally debuted on E! — she’s actually been a fascinating figure in the public eye for ages.  As

What Is Kylie Jenner’s Net Worth? 

Kylie Jenner

The Kar-Jenner family is loaded thanks to their business prowess (and fierce momager, Kris Jenner.) Kim Kardashian said it best when she lamented that it “seems like nobody wants to work these days,” but these sisters never have a day off. And that’s why the topic of Kylie Jenner’s net worth is so intriguing.  But

What Is Taylor Swift’s Net Worth? 

Taylor Swift for "The Tortured Poet's Department"

Taylor Swift is a megastar singer-songwriter known for her narrative songwriting, catchy pop tunes, and versatility across genres like country, pop, and indie folk. She breaks every music record with ease, partially thanks to her die-hard Swiftie fans who follow her with vigor and buy out every single show. And with Taylor Swift’s net worth

Considering A Microwedding? Here’s How To Plan Yours

Microweddings are the next hottest trend.

Traditional weddings can be incredibly stressful, not to mention super pricey – many newlyweds couldn’t buy a house with that money. What’s supposed to be the happiest day of your life can often feel like an endless quest for absolute perfection – almost as if the ceremony doesn’t come off flawlessly, the marriage itself will