An academic approach to quantitative investment strategies
Transparency, cost-effectiveness & rationalisation
With indices driven by algorithms, clients can be sure that they are in total control of their investments.
Without intermediaries, institutional investors can directly access strategies, effectively reducing costs.
Finally, once clients know exactly what’s in a strategy, they can try to anticipate the future behavior of a fund and understand and quantify its risk and return features, which some portfolio managers find useful in the construction of their global portfolio.
Before launch, all indices must go through an investment committee involving internal experts – including Legal, Compliance and investment specialists – who investigate whether a strategy makes sense.
A stress test is also carried out, which simulates changes based on financial market movements and tests the various parameters involved in the strategy.
Clients are masters of our pre-tested algorithms
Once an index is launched, there is no human intervention involved and we would never override an algorithm – though BNP Paribas might decide to launch a new, improved version.
Although some clients take off-the-shelf strategies, many want to discuss how to tailor them to meet their particular needs – whether for their global portfolios, or specific objectives in terms of risk and return or macroeconomic views, and we are here to help.
The QIS Lab experts
Head of QIS Lab, Global Markets, BNP Paribas
QIS researcher, Global Markets, BNP Paribas