Two distinct approaches have evolved in active investment management: systematic (or quant) and discretionary investing. Systematic approaches rely on algorithms for a repeatable and data-driven approach to identify investment opportunities across many securities; in contrast, a discretionary approach involves an in-depth analysis of a smaller number of securities. These two approaches are becoming more similar as fundamental managers take more data-science-driven approaches.

Even fundamental traders now arm themselves with quantitative techniques, accounting for $55 billion of systematic assets, according to Barclays. Agnostic to specific companies, quantitative funds trade patterns and dynamics across a wide swath of securities. Quants now account for about 17% of total hedge fund assets, data compiled by Barclays shows.

Point72 Asset Management, with $12 billion in assets, has been shifting about half of its portfolio managers to a man-plus-machine approach. Point72 is also investing tens of millions of dollars into a group that analyzes large amounts of alternative data and passes the results on to traders.