The term "black box" investing has often been
applied to quantitative fund management, though it is seen by
its practitioners as a somewhat pejorative description.
Whatever black boxes they have at BGI, they certainly seem to
work.
Traditional active managers use the phrase while looking down
their noses at quant fund management and its reliance on
technology. They feel it lacks the panache of stock-picking.
Yet the performance of the old-school investors in recent years
has not been anything to shout about. And set against that, Andrew
Skirton, co-CEO of BGI, is keen to underline his firm's management
style. "We are not in the entertainment industry," he says. "Our
philosophy is that investment is a science and not an art."...
