Relentlessly Disciplined Quantitative Strategies
MDT Advisers, a Federated Advisory Company, is an innovative quantitative investment management firm located in Boston. Founded in 1988, we offer a wide array of U.S. equity investment strategies to individuals and institutions through institutional accounts, managed accounts and mutual funds.
All of our investment strategies utilize our relentlessly disciplined Optimum Q process, a unique quantitative approach to investing in U.S. equities. Its objective in all strategies is the same: to exploit multiple market inefficiencies to outperform the appropriate benchmark with moderate relative risk. The process consists of three main elements: portfolio selection, trading and model construction.
Portfolio selection A bottom-up process integrates stock selection, trading cost control and risk control to trade portfolios daily. A model analyzes several stock selection variables to assess profit trends, company valuation and earnings risk from fundamental and behavioral perspectives. These assessments combine with estimates of potential trading costs and, where applicable, tax costs to determine the optimal portfolio subject to diversification constraints.
Trading Actual trade decisions are fully transparent, yet purely quantitative, the product of a robust, completely integrated process. Proposed trades produced by the quantitative computer model are reviewed in an effort to ensure that they are based on accurate and current information. If they aren’t, trades are deferred until the model incorporates timely and accurate information.
Model construction Models use advanced, computer-intensive algorithms and proprietary software. The software uncovers non-linear relationships inherent in financial data and estimates all model parameters simultaneously in a dynamic real world multi-period portfolio selection context.