Investment flow tracking is next ‘frontier’ in unlocking alpha

Risk Live: Flows impact asset prices more than widely believed and may be more predictable – quants


In the future, systematic investors will rely less on the fundamentals- and price-based ratios they have traditionally used and focus more on tracking investment flows, according to quantitative investing specialists.

“The [new] frontier for quant investing is not just doing value [investing] with price multipliers or price ratios but seeing who is buying or selling,” said Xavier Gabaix, a finance professor at Harvard University.

“If you have these disaggregated flows, you can predict the

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