One of the benefits of systematic investing is that we can look at data beyond the simple fundamentals by looking at big data sets, alternative data and technical data. Such breadth is quite helpful when markets are either very extended, as they can be late in a cycle, or when things change quickly. Our models have the ability to adapt to this environment and adapt to things other than just pure fundamentals.
One of the main risks to systematic investing is choppy, sideways market environments - this is a risk that is also applicable to discretionary managers, as well as long only or alternative managers. Systematic strategies are not immune from that risk if markets are choppy and sideways for a lengthy period of time and it can be a difficult environment for us to hit our expected returns.
Markets are currently challenging for a lot of investment styles because there's a high degree of uncertainty about global growth and political risk. Our systematic models are highly adaptive; therefore as the market improves or deteriorates our models have the ability to shift their positioning very quickly. This helps us navigate these sorts of markets – with a willingness and an ability to change our positioning when the facts change.