PT  - JOURNAL ARTICLE
AU  - Russell B Gregory-Allen
AU  - Hany A Shawky
AU  - Jeffrey Stangl
TI  - Quantitative vs. Fundamental Analysis in Institutional Money Management: <em>Where’s the Beef?</em>
AID  - 10.3905/JOI.2009.18.4.042
DP  - 2009 Nov 30
TA  - The Journal of Investing
PG  - 42--52
VI  - 18
IP  - 4
4099  - https://pm-research.com/content/18/4/42.short
4100  - https://pm-research.com/content/18/4/42.full
AB  - In the money management industry, there is a “quiet” controversy over who does a better job, traditional managers (fundamentalists) or quantitative managers. This issue has recently been examined by Zhao [2006], Wermers, Yao, and Zhao [2007], and others. This article reexamines the issue looking at the period January 2002 to December 2006 using the Plan Sponsor Network Database, which reports how managers actually manage investment portfolios regarding the types of stock selection methods used. This allows the authors to examine not just the primary method used (quantitative, fundamental, or other), but also the impact of secondary methods. The empirical results indicate that when examining performance attributable to the use of a distinct primary investment process, only the fundamental approach significantly adds value. However, when examining marginal performance of a secondary process, over and above a primary approach, no process adds value, and in fact some detract.TOPICS: Manager selection, equity portfolio management, fundamental equity analysis