Embrace Technology

To steadily create value for you, we embrace modern technology. With its help, we constantly expand our information set — which we access anywhere, anytime — to help avoid data problems and act quickly. Since we pay attention to every detail, and question every assumption, we exploit ideas that we expect to deliver real returns in real markets.

At Qtron, we ride technology waves and apply what we consider to be a groundbreaking research platform.

Consistent Excess Return is the Key

Return and risk are the two sides of the same coin. We recognize the importance of consistency. To achieve that, we seek to discover links among spanning horizons, exploit investment latencies, and answer when to harvest returns. We find patterns in investors’ perceptions and condition information to treat misspecifications of one-size-fits-all models.

At Qtron, our goal is to achieve high risk-adjusted return — Information Ratio — so that your portfolio does not dance three steps forward and two steps back.

Portfolio Management is Part Science, Part Art

The expected rarely happens; we need to anticipate the unexpected. Typical risk models are built to react. With only numbers that describe the past, they are unlikely to fully address the complexity of the future. We supplement the quantitative risk control with a crisp investor’s judgement.

At Qtron, the science part of risk management is quantifiable — models control market and alpha-model risks; the art part is non-quantifiable — portfolio managers gaze deep into the unknown and adapt swiftly to the changing environment.

Alignment of Incentives

To properly align incentives is imperative. Over-promising and under-delivering are predominant reputational risks in the investment management industry. The incentives structure can often be misaligned and may not work in your best interests. For example, it can be more important for some firms to grow assets than to generate outperformance. Misaligned incentives can also destroy investment culture and repel talent.

Qtron Investments is an investor-driven organization. We only sell what we believe in, not what we can sell. We hire savvy professionals and create what we see as an optimum work environment.

Accountability

To instill accountability is critical. The truth behind the team-oriented approach is ‘everyone is responsible, yet nobody really is.’ You seek outperformance and accountability. You want to know who makes investment decisions. Separating research and portfolio management into two disconnected teams is not what you want. Putting everyone onto the ‘team page’ is not what you need. Saying a departed member has never been important does not sound right to you.

At Qtron, our culture is to assign individual responsibilities and credit the person who contributes new ideas. This way you know who loses sleep over your portfolio, and who is the brain behind creative research.

Proprietary Technology vs. Open Source Architecture

Adopting a new technology requires a revolutionary jump. A gradual evolution is insufficient. Vertical integration and proprietary software were competitive advantages of large financial firms — in the past. But they are costly to implement nowadays. New technologies have disrupted the investment industry as we know it.
We believe cloud computing and an open source architecture can achieve greater scale and build robust investment systems at a lower cost. Yet, the industry is slow to adapt. Transitioning responsibilities away from in-house IT teams can be an intense struggle within large organizations. The people in charge of finding solutions are often a part of the problem itself.

At Qtron, we are fortunate to not be burdened by a proprietary technology. We have already jumped.

Vertical Integration vs. Horizontal Coopetition

Historically, vertical integration plus economies of scale tilted competitive advantage in favor of behemoth companies. Today, however, declines in computing costs have exerted a dramatic downward pressure on transaction costs. Working with external companies has become cheaper and trusting them — easier. While it was unthinkable to outsource information technology infrastructure to a third party in the past, today we hear countless success stories, such as Netflix or Instagram.
Benefits of vertical integration are collapsing. Small becomes beautiful and efficient. Small firms can focus their energy on core competencies — what they do best. Vertically integrated value chains are transforming into horizontally integrated “coopetition” — cooperative competition. Why is horizontal coopetition more efficient? For the same reason that the global free trade enriches more than protectionism.

At Qtron, we believe horizontal coopetition is the efficient way forward.