Taquanta introduces new investment management technique to Quants fund

A new, quantitative investment management technique which could double the terminal value of an investment relative to the General Equity Unit Trust average over the long-term, has been introduced by Taquanta Asset Managers (TAM) to one of the funds under its management.

A subsidiary of the black-owned financial services group Taquanta Investment Holdings, TAM has managed the Nedgroup Investments Quants Core Equity Fund since its launch in November 1999.

"While the mandate, objectives and benchmark of the fund remain unchanged, the new technique Price Indifferent Investing (PII) is being added to the range of techniques already utilised.  This new methodology should enhance the attractiveness of the fund as a core fund in the general equity unit trust space," says TAM joint-MD, Stephen Roberts.

According to Roberts, international research as well as research undertaken locally by Taquanta, consistently indicates that this approach can add significant value to the benchmark over the course of a typical investment cycle.

"Effectively, this new approach retains most of the benefits of systematic investment specifically low cost.  We estimate with this methodology the fund's Total Expense Ratio (including trading costs) will be about 1% lower than the average of competing funds. Lower costs are the most certain form of out performance," he adds.

"In addition, it eliminates the main pitfall of market cap weighting - structurally over-weighting the most overpriced shares and under-weighting the most undervalued -  even though which is which can only identified with hindsight.

"We expect the volatility and drawdowns of the portfolio to be lower on average than that of the benchmark," Roberts concludes.