Wes Gray runs his boutique investment firm Alpha Architect with the determination you’d expect of a former US Marine. In a competitive industry dominated by big names, his small team of ‘quant ninjas’ are endeavouring to make themselves unkillable.

They’re doing it by bringing factor strategies and quant investing to regular investors. There’s no black box or secret sauce, and there’s no flashy office. Instead they’re leading on education - with blogs, books and research - to show how factor premiums can deliver long term outperformance - even though they’ll make your life hell at times (at least on a relative performance basis).

Alpha Architect is based at Wes’s home on the outskirts of Philadelphia. Standing among the desks and monitors in the kitchen is an eight-foot stuffed grizzly bear. Walk through to the back and it opens into a huge space, with more large stuffed animals - including a leopard. The house was once owned by a game hunter but Gray (typical for a classic value investor) bought it in a distressed sale - and the stuffed animals came for free. Now it’s a symbol of his efforts to offer transparent, marketing-free, win-win ‘affordable alpha’ with strategies that most investors can’t stomach on their own or can’t find anywhere else.

Wes and his team currently manage just over a billion dollars of client money, roughly half of which is spread across their 5 exchange-traded funds. They include US and international versions of Quantitative Value and Quantitative Momentum plus a crossover Global Value Momentum Trend strategy that was launched in 2017. The ETFs are concentrated and regularly refreshed to keep them as closely aligned to the value and momentum factors they aim to profit from.

I went to visit Wes and his team and spent three hours talking about football, finance and the epic battle they are preparing for in their mission to take more concentrated factor portfolios  to the masses...

Wes, tell me about how you got into investing and your journey from being a value stock picker to a quant-driven factor junkie?

Ben Graham was my first intro to investing. I grew up on a ranch in Colorado and I came into a little money early on when I sold my 4-H steer at the county fair. My grandmother was an old-school value stock-picker and she was the only one in the family who even knew what…

Unlock the rest of this Article in 15 seconds

or Unlock with your email

Already have an account?
Login here