O’Shaughnessy Quarterly Investor Letter Q1 2019

O’Shaughnessy Asset Management is a Stamford-based quantitative money management firm with around $5.4 billion in assets under management. It manages a variety of equity portfolios for its clients (who can be both individual and institutional investors, high-net-worth clients of financial advisers), and also manages mutual funds in the US. Recently, O’Shaughnessy Asset Management released its Q1 2019 Investor Letter – a copy of which you can download below. In the letter, the fund presented two examples of how it tries to improve its performance, with one being broadening of its “research graveyard” and the other being formation of a web of interconnect software-based tools. In conclusion, Patrick W. O’Shaughnessy, the fund’s CEO and Portfolio Manager, wrote:

As quants, we will obviously succeed or fail with our models. Models, even those based on the same factors through time, need tending. But any quant model is the result of what is happening upstream in the business and on the research team. We like to think we have our share of geniuses(Jim O’Shaughnessy and I are surely the least talented researchers on the team), but also believe that edge lives in an organization, not just in people. Hopefully, the examples in this letter illustrate how we try to cultivate an advantage for our investors, and structure the business so that the advantages naturally increase over time.

In our business, we sense a blurring of lines between firms trying to grow the overall pie of investor understanding and knowledge rather than trying to find secrets and hoard them. I believe this is the foundation of an enduring asset management business in today’s world. We will keep testing, building, and sharing what we find.


You can download a complete copy of O’Shaughnessy Quarterly Investor Letter Q1 2019 here: