FidelityConnects · Oct 7, 2026 · 28m · 17m saved
With Anna Lester, Portfolio Manager at Fidelity Investments · Bryan Anderson, Investment Director at Fidelity Investments
Fidelity's new global quant equity strategy keeps every sector, industry, country and region within 2 percentage points of its MSCI benchmark, and every stock within 1 point of its index weight. Its portfolio manager said she has the power to override the model's trades and almost never uses it.
Quant funds are often described as black boxes. Anna Lester described hers as something else.
"So I've often heard quant described as a black box and what I say is it's not a black box. It's a giant calculator."
Anna Lester, Portfolio Manager at Fidelity Investments, on FidelityConnects, has worked as a quant for 25 years and co-authored a paper on AI almost 20 years ago. Bryan Anderson, Investment Director, works alongside her on Fidelity's enhanced equity team, part of a quantitative research division with about 200 investment professionals and more than 270 technologists. The Fidelity Global Quant Equity ETF (FGQE) and its mutual fund version launched the day the episode aired. The conversation was recorded on October 1.
The full episode is covered here so you can skip it. 28 minutes of audio, 11 minutes of reading.
Here are the 13 insights that matter.
Key Takeaways
The fund is built to look like its MSCI index, with stock selection as the only source of extra return
Active positions stay within 1% of the benchmark and sector and country weights within 2%
Machine learning has been in Lester's process for years, long before large language models made AI news
The model reads the words managers use, not only the numbers they report
People with good news speak briefly, quote numbers and use positive words
A signal needs both data and an economic reason before it goes into the model
Lester can count on one hand the times she has overridden the model in the past few years
A global universe gives a quant model more stocks to choose from, which raises the odds of finding good ones
The fee is 55 basis points, which Anderson said scale and shared Fidelity services make possible
1. AI Is Not New to Quants
The host noted Lester's 25 years as a quant.
The tools changed; the philosophy did not
Lester said she studied math and computer science at MIT. Her view of what drives stock returns has not changed since she started, but early in her career she heard objections that a technique needed more computer memory than existed, or that she was storing too much data.
"It's really a whole new and much more exciting world for quantitative investing today." — Anna Lester
Machine learning has been part of her process for years
Asked whether AI is new for the group, Lester said no. Large language models are what put AI in the news, and she uses them at work and at home, but they are one part of a much larger field.
"For example, there's a technique called machine learning that's been in my investment process for years looking for more complex nonlinear relationships among stocks." — Anna Lester
She said she co-authored a paper on AI almost 20 years ago.
