Quantitative finance is a field of applied mathematics, involved with financial markets, which uses various mathematical techniques to understand, structure and monitor investments.
We believe that this is the best way to invest optimally given the tremendous amount of information. One of the many benefits of using this approach is the ability to apply various mathematical and academic techniques to analyse financial data and construct robust portfolios. Although this may sound quite futuristic, this is a field which we studied for years and lecture at the University of Witwatersrand.
Using quantitative approach to asset management, means we use mathematical techniques to understand, construct, monitor and re-balance our investment portfolios.
Advicement uses many sophisticated techniques to presents this analysis to our clients using our online investment process.
The finance world is divided into two approaches towards asset management, one method uses active funds, while the other advocates the use of passive instruments such as Exchange Traded Funds (ETFs). The passive approach has been gaining a lot of momentum overseas due to its lower fees while also being supported by academic studies.
We, at Advicement, agree with the passive approach and only use ETFs in our portfolios. We believe that in the long run, the low cost of passive instruments ensures superior performance when compared to the more expensive active approach.
The benefit of diversification in finance means not putting all your eggs in one basket and having exposure to many different asset classes. This is an important consideration when constructing investment portfolios.
Utilising various mathematical techniques, we make sure that our clients benefit from the positive effects of diversification.
Strategically, we have chosen the Advicement benchmarks to be the average return of the funds in the various ASISA categories. The reason for our choice is that it is possible to replicate their performance through sophisticated portfolio construction techniques and the use of passive investment products while bringing same performance benefits.
Concerning performance, our clients are better off in picking an Advicement portfolio rather than an active fund at random.