Data-driven strategies, sharper firm insights: How AI can help quant investors boost returns

ARTIFICIAL intelligence (AI) is rapidly transforming industries and creating new opportunities. In fact, even as markets saw turmoil in early 2025, global investment in AI has only accelerated.

In this new era, AI matters for every investor. The question is: Are your strategies evolving fast enough?

Since 2019, asset management firm Robeco has integrated next-generation techniques – such as machine learning (ML), natural language processing (NLP) and alternative data signals – into its quant strategies.

These innovations have enhanced Robeco’s performance, contributing positively to excess returns.

The key is understanding how to harness AI: by using it to improve the investment research process and develop innovative alpha strategies on the one hand, and investing in the companies leading this technological wave on the other.

Three ways AI is reshaping quant investing

1. Supercharge strategies with AI

Quant strategies have always been driven by data and technology – and AI is the latest chapter in that evolution. Techniques like ML and NLP, long studied at Robeco, now operate at unprecedented scale and sophistication.

ML uncovers complex, non-linear patterns and enhances signal generation, while NLP interprets nuanced sentiment from textual and audio data, enriching market insights.

These advances exploit alternative data – massive, fast-moving streams from sources like credit card transactions and satellite imagery.

Incorporating AI into investment processes offers both quant and fundamental investors the advantages of faster speed, broader sources of information and better information processing.

But it also necessitates being purposeful, clear-headed and transparent when using AI in these processes.

2. Deploy AI as alpha driver

With vast new data and computing power at their fingertips, quant investors today can access sources and techniques that were out of reach a decade ago.

Robeco’s quant team, for example, has expanded its toolkit to include everything from sector-specific signals to novel alternative datasets.

To ensure quant strategies evolve in a robust, evidence-based manner – preserving the reliability investors expect – Robeco has developed dedicated AI-driven strategies within its incubator.

This has led to the launch of a few innovative next-gen strategies.

3. Target AI investments

AI has also emerged as a dominant theme in investment portfolios. With its seemingly infinite capacity to take on diverse tasks from computer coding to drug development, AI has been heralded as the next era in technology, akin to the personal computer, the internet and the smartphone.

While the impacts of such technological shifts are broadly felt, there are typically fewer beneficiaries.

Therefore, Robeco focuses on identifying providers of foundational technologies and those adopting the technology within the core of their business to create value.

These opportunities require careful analysis – looking at the substance behind the AI claims. Does the company have proprietary data? Have they hired AI talent? Is there a defensible strategy to monetise their AI capabilities?

By asking these questions, Robeco aims to separate the hype from the reality and potential.

AI washing

Importantly, Robeco treats AI as a means to enhance its investment process, not as a magic wand.

There is a lot of “AI washing” out there – it is tempting, after all, to claim AI involvement just to sound cutting edge.

That is why it is crucial that every new technique or signal proves its worth – with rigorous backtesting.

Investors should not incorporate an AI-based idea just for the sake of it; at Robeco, many seemingly promising signals have been tested and discarded because they did not add value beyond its existing models.

Ultimately, AI investing is a long-term endeavour, as AI’s impact on the economy has yet to be fully realised.

There will be volatility – hype cycles, regulatory twists and competition – but the secular trend is pointing towards more AI, not less.

By continuing to use AI to improve investment decisions, developing new, innovative strategies and investing in AI, Robeco strives to deliver the benefits of this powerful theme to its clients. For investors and AI, the future is bright.

Take Robeco’s AI course to learn how AI is transforming investment strategies.

Disclaimer:

Important information – capital at risk

This information refers only to general information about Robeco Holding B.V. and/or its related, affiliated and subsidiary companies, (“Robeco”), Robeco’s approach, strategies and capabilities. This a marketing communication intended solely for professional investors, defined as investors qualifying as professional clients, who have requested to be treated as professional clients or who are authorized to receive such information under any applicable laws. Unless otherwise stated, the data and information reported is sourced from Robeco, is, to the best knowledge of Robeco, accurate at the time of publication and comes without any warranties of any kind. Any opinion expressed is solely Robeco’s opinion, it is not a factual statement, and is subject to change, and in no way constitutes investment advice. This document is intended only to provide an overview of Robeco’s approach and strategies. It is not a substitute for a prospectus or any other legal document concerning any specific financial instrument. The data, information, and opinions contained herein do not constitute and, under no circumstances, may be construed as an offer or an invitation or a recommendation to make investments or divestments or a solicitation to buy, sell, or subscribe for financial instruments or as financial, legal, tax, or investment research advice or as an invitation or to make any other use of it. All rights relating to the information in this document are and will remain the property of Robeco. This material may not be copied or used with the public. No part of this document may be reproduced, or published in any form or by any means without Robeco’s prior written permission.

Alpha refers to the excess return of an investment relative to a benchmark index and is a measure of performance.

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This information is for informational purposes only and should not be construed as an offer to sell or an invitation to buy any securities or products, nor as investment advice or recommendation. The contents of this document have not been reviewed by the Monetary Authority of Singapore (“MAS”).

Robeco Singapore Private Limited holds a capital markets services licence for fund management issued by the MAS and is subject to certain clientele restrictions under such licence. An investment will involve a high degree of risk, and you should consider carefully whether an investment is suitable for you.