Some companies disclose a lot of information about sustainability, labor practices, or gender equity. Others say almost nothing. A fund manager buying a few dozen large-cap U.S. stocks may be able to have analysts dig up enough corporate info to make a decision. But things get harder if you want to be able to choose from thousands of stocks, or evaluate small companies or emerging-market equities.
Quantitative investors say they have a solution. These traders use computers to sort through reams of data, and they say they’re better than anyone else when it comes to making investment decisions based on messy or incomplete information. Quants are “used to filling in the gaps,” says Andrew Dyson, CEO of QMA, a quantitative investment firm that’s part of asset manager PGIM. It launched a socially conscious investment strategy in 2018.