It was a pleasure to welcome Jessica Stauth, CIO for Systematic Equities at Fidelity Investments, to the Alpha Exchange. Our discussion explores how quant investing has evolved through cycles of market stress, technological change, and today’s extraordinary concentration in the equity landscape. Reflecting on her start in markets in the aftermath of the 2007 Quant Quake and the onset of the global financial crisis, Jessica highlights the foundational lesson that markets contain far more uncertainty than models can fully capture — a theme as relevant today as investors confront narrow leadership and elevated fragility. She explains how early dislocations demonstrated the limits of traditional risk models and the dangers of crowding, especially when many quantitative strategies rely on similar signals or hedging techniques.

Turning to the present, Jessica describes how her team builds equity strategies designed to function across regimes, emphasizing the need for diversified risk models, guardrails that prevent overfitting, and a clear understanding of how macro shocks can overwhelm bottom-up stock selection. She details the evolution of factor research, including the durability of broad categories such as value, momentum, and quality, while outlining how competition and data availability reshape their effectiveness over time. Lastly, she discusses the growing role of non-traditional data — from earnings-call text to machine-learning tools and LLM-driven sentiment extraction — while underscoring the importance of broad, consistent datasets that can be applied across global universes.

Against the backdrop of the S&P 500’s heavy top-weighting, Jessica details how diminished breadth affects opportunity sets, investor demand for alternative approaches, and the search for alpha outside the most crowded areas of the market.

I hope you enjoy this episode of the Alpha Exchange, my conversation with Jessica Stauth.

Jessica Stauth, CIO, Systematic Equity, Fidelity Investments

Alpha Exchange

Jessica Stauth, CIO, Systematic Equity, Fidelity Investments