GLOBAL - Watson Wyatt said it remained cautious about quantitative methods in a recent paper on the investment strategy.
The paper also commented: "It is possible that the market's increasing focus on some of these issues may lead to increased volatility in some sectors making it a more difficult environment for some quant strategies."
The Watson Wyatt paper also echoed sentiments heard over last summer's credit crunch, such as overcrowding of managers using similar data sets or with strategies based on too low volatility scenarios.
However, the consultants found a positive side to the strategy saying the it systematically exploited intuitively attractive metrics.
The paper continued: "They are objective and hence less prone to some behavioural biases that can negatively impact fundamental managers, and they can process large amounts of data for many stocks very quickly."
Quantitative strategies attracted much criticism during the credit crunch which saw several funds using the strategy 'blow up'.
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