Why one dealer builds its own evidence-based investment tools
How to view financial history in an evidence-based approach
Lee stresses that historical financial data and analysis needs to be understood in the context of its particular economic and monetary conditions. He says that using the Bloomberg tool BQuant, his team can look at how different metrics perform during different investment climates and regimes. The vast and growing wealth of research conducted on financial performance in these different regimes can be instructive.
Lee also emphasized that a view of historical performance in the context of its times is helpful now, as after the COVID-19 pandemic and post-pandemic inflation, the world has returned to far more ‘normal’ monetary conditions of higher rates and higher inflation than existed for the period following the great financial crisis.
Access and advantages
As things currently stand, Q Wealth Partners are making their evidence-based strategies available to their advisors alone. Lee says that the firm may expand into publicly available ETFs at some point, but that they want to use their internal capabilities to build performance and track records for these strategies. He notes that by keeping the strategies in house, any fees earned by the funds can be reinvested into the technology underpinning them and in the talent of the people who manage these strategies.
Lee believes that an evidence-based approach works best for public market strategies, both equity and fixed income. Private markets, he notes, tend to lack the wealth of easily accessible and historical data that this approach necessitates. He says, though, that an evidence-based approach can function as a real alpha driver, saying that The Q Wealth Factor iQ Canadian Dividend Fund, since its inception in late January of 2025, would have been ranked #1 in Morningstar’s Canadian dividend category, if it were publicly available. While those outperformance metrics can be impressive, Lee says that the real goal is to pursue specific outcomes, be that outperformance, lower volatility, dividend growth, or whatever else the client base requires.
“We’re actually trying to stay away from performance. I know the industry is built upon performance chasing,” Lee says. “We’re taking more of an institutional approach where it’s more so about delivering your objective.”
