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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.




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Market Overview
Fourth Quarter 2011

After a weak third quarter, the market rebounded in 4Q to eke out a positive ending to 2011. The S&P 500 rose +11.8%, the Russell 2000 gained +15.5% and the Nasdaq moved up +7.8% in the quarter but for the year, the markets gained barely +1% highlighting a high volatility environment. The best sector, by far, was Utilities, rising +14.8% while financials fell -18.4% under credit and liquidity concerns.

Two periods defined the market in 2011. The first was January-July when markets rose and volatility stayed low, around 22%. The second was August-December which saw markets swings and higher volatility in response to a budget impasse in the US and debt crisis in Europe.

Value themes did well in the 4Q and finished the year on a strong note. Predicted Earnings yield and Sales/Price were the best value indicators this quarter. Dividend yield also showed strength as investors sought stocks with higher yields than Treasuries.

Growth and Momentum themes also did well in 4Q, recovering from a weaker 3Q performance. Long Term Growth and Estimate Revision were the two best components while Price Momentum weakened in the quarter. Clearly, the higher volatility environment in the second half of the year disrupted several momentum trends.