In the changing world of finance, where instinct, emotion, and experience have often held sway, quantitative investing has emerged as both a disruptor and a guidepost since its conception in the mid to late twentieth century. It’s a field of investing where data doesn’t just support decision-making – it drives it.
As we stand at the crossroads of a tech revolution powered by artificial intelligence (AI), the role of a quant investor has evolved from being a quiet force behind the scenes to taking centre stage.
In this paper, the MDT team at Federated Hermes trace the origins of quantitative investing, exploring the rise of systematic strategies and the core principles that have stood the test of time – chief among them, the disciplined search for return-driving factors. The team explain why a forward-thinking approach, which considers factors like company age, economic moats, and other structural characteristics, presents advantages over traditional fundamental equity strategies, and what sets their approach apart.
We hope this report offers insight and inspiration for investors who recognise the exciting new possibilities a quant approach can unlock.
Spectrum Q3 2025
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