Axioma: Adding Alpha by Subtracting Beta - A Case Study on How Quantitative Tools Can Improve a Portfolio's Returns

Fundamental (discretionary) portfolio managers typically build their portfolios from the bottom up. That is, they identify stocks they expect to beat the market and combine them to create a portfolio. However, fundamental managers can leverage quantitative tools to help identify and lessen potential issues in their portfolio, while still maintaining their investment views and goals. In this paper, we’ll use a “real world” portfolio¹ to illustrate how quantitative tools can improve a portfolio