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Quotient Investors is recognized for its unique intra-industry investment approach. Quotient targets superior risk-adjusted returns across multiple U.S. products. Using a disciplined approach to build its proprietary intra-industry model, Quotient incorporates value, growth, momentum, and custom valuation models to identify the price drivers that are unique to each industry.

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Quotient is committed to delivering innovative research, a disciplined investment process, sophisticated algorithmic trading, strong information ratios, together with personalized client service.  Quotient, an SEC registered investment advisor, was founded in 2007 and is a majority employee-owned firm.

Quotient Investors, a new emerging manager, is the first manager selected by Strategic Investment Group for the CalPERS Manager Development Program II. Quotient's experienced investment team comes from a major global institutional management firm with track records dating back to 2000. Quotient has demonstrated expertise in alpha generation, risk control, algorithmic trading and customized client service.

Market Overview
Fourth Quarter 2009

The markets finished the year with another positive quarter: the S&P 500 was up +6.0%, the Russell 2000 up by +3.9% and the NASDAQ up by +6.9%. The performance for the year was very strong, with the S&P 500 up 26.5% but still left the index off the peaks in 2008. Meanwhile, market volatility has decreased consistently throughout the year, with peaks near 55% in January giving way to values below 20% in December.

The Russell 1000 Growth index, with a gain of 7.9%, readily outperformed its Value counterpart in the 4th quarter, up only 4.2%. For the year, Growth almost doubled the performance with a return of 37.2% versus Value’s 19.7%. Technology was by far the best sector, up 60% for the year while the Utility sector lagged the market with a +6.8% gain. As fears of an economic crisis faded, volatility decreased and risk appetite increased for investors, favoring growth stocks.

The performance of Value themes was mixed this year, with the best performance occurring in the 2nd quarter. The 1st and 3rd quarters were negative for value. Growth and Momentum themes, instead, had a strong 1st quarter but lagged in the 2nd and 3rd quarters. Overall, there was no constant theme this year as styles rotated in and out of favor.