In depth knowledge is needed to as the investment algorithms employ advanced optimization methods using the latest academic insights. Many quantitative specialists have a PhD in Financial Economics, Engineering or Mathematics. Quantitative portfolio managers and quantitative analysts usually require a strong background in mathematics and computer science, besides knowledge of the academic financial literature. Portfolio construction engine: portfolio composition using optimizers or a heuristics-based system (see Portfolio optimization and Mathematical tools).Forecasting engine: Generating estimations for prices and returns and also, risk parameters.Input system: Providing all necessary inputs such as market data and rules (see financial data vendor).The quantitative investment process, essentially, breaks down into three key components: If investment decisions are based on fundamental analysis and human judgement, the process is classified as fundamental. Investment process See Outline of finance § Quantitative investing for a listing of relevant articles.Īn investment process is classified as quantitative when investment management is fully based on the use of mathematical and statistical methods to make investment decisions.

Quant fund