On the Style Edge : Discretionary vs Systematic

The systematic style is a combination of a systematic strategy's (model's) decisions and those of the portfolio manager's. Whilst the model's trades are implemented via changing positions in financial instruments, the systematic manager's trades are changes made to the systematic strategy (model) itself. Statistical methods of evaluation of investment managers be they discretionary or systematic, can only be applied within certain limits. Similarities between discretionary and systematic investment management firms in their exposure to the key person risk are stronger than it is commonly believed to be the case