stock is performing one way in a certain economic climate, its performance will be evaluated in a comparable economic situation.
“Most quant funds hold domestic stocks,” says Wiecking, “but a few, such as those from Laudus Rosenberg, have international issues.” Indeed, quant investing may be valuable for international stocks. Outside the U.S., mutual fund results are largely determined by how well money managers pick the right countries. A quant fund can reduce the volatility that results as countries fall in and out of favor.
Still, just because a fund is in the “quant” category, there is no guarantee of success. “A poor model will give you poor results,” says Wiecking. Denise Valentine, a senior analyst in the New York office of Celent, a Boston-based research and consulting firm that specializes in the financial services industry, says you may want to make quant funds a small percentage of your portfolio for diversification, but proceed with caution. “Compare the fund across market cycles and find out what risk controls are in place,” she suggests. “Be sure you understand the overall strategy. Those running the quant fund should be able to articulate the methods they’re using. It should not be, ‘We put the numbers in and stocks come out.’”
|Fund Name||Ticker||1-Yr. Annualized Return*||3-Yr. Annualized
|5-Yr. Annualized Return*||Minimum Initial Purchase||Phone Number|
|Quant Emerging Markets Ord||QFFOX||27.15||39.85||22.79||$2,500||800-326-2151|
|Laudus Rosenberg Intl Small Cap Inv||RISIX||21.79||34.61||16.06||$2,500||800-447-3332|
|Quant Foreign Value Ord||QFVOX||14.20||26.03||16.67||$2,500||800-326-2151|
|Bridgeway Aggressive Investors 2||BRAIX||20.17||23.26||NA||$2,000||800-661-3550|
|Quant Small Cap Ord||USBNX||14.49||22.14||7.80||$2,500||800-326-2151|
|Laudus Rosenberg International Eq Inv||RIEIX||12.70||19.60||NA||$2,500||800-447-3332|
|Quant Growth & Income Ord||USBOX||12.52||10.00||-2.33||$2,500||800-326-2151|
SOURCE: MORNINGSTAR INC.
MORNINGSTAR MAKES EVERY EFFORT TO ENSURE THE COMPLETENESS AND ACCURACY OF THIS DATA BUT CANNOT GUARANTEE IT.
*RETURNS THROUGH NOVEMBER 30, 2005