Strictly By The Numbers

Some funds use only statistical data to avoid risk

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
Return*
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

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