Over 25 Years of Experience

Investment Philosophy

INTECH’s investment philosophy is based on five key tenets:

  • Capitalization-weighted indexes are inefficient.
  • Forecasting stocks’ future rates of return is not required to outperform an index or the market.
  • Volatility drives returns.
  • Systematic rebalancing captures alpha.
  • Risk management is a key to generating alpha.

Process Overview

INTECH’s investment process can be applied effectively to a variety of equity markets and benchmarks, with varying levels of aggressiveness and with relative- or absolute-risk objectives. Our process relies on the estimation of relative volatility and correlations, optimization for a more efficient portfolio and rebalancing to capture gains and control risk.

Process Steps:

Integrating specific risk controls:

  • Step 1: Robustly, accurately and timely estimate stock-price volatilities and correlations.
  • Step 2: Find the most efficient portfolio configuration and determine trading bands for stocks.
  • Step 3: Efficiently capture gains via a proprietary trading system as stocks hit trading bands.
  • Step 4: Rebalance and re-optimize periodically.