How data is changing investments

Jun 29 2017 08:00

Technological disruption is rife in many spheres of business, from the motor industry through to newspaper publishers, taxi services, cellular networks and even pizza delivery companies. Given the quantity of data available, it’s no surprise that the way in which asset managers work is also changing fast, as they use more data from more sources to measure sentiment as a possible predictor for market behaviour.

While data sources available to investors have been mounting for years, it is now possible to mine and analyse this overwhelming volume of data from sources such as wire news stories to help read public sentiment – known as machine-readable news – as well as from social media. These data sources can help give indications on what might make a good buy or a good sell in the markets based on a data-driven understanding of how this information might drive behavioural biases, which in turn drive share prices.

Old Mutual Investment Group’s Customised Solutions boutique specialises in index-linked investments, Shari’ah-compliant funds as well as quantitative investment funds but, as its joint heads Grant Watson and John Gilchrist explain in this conversation with Fin24, the power of data to influence investment decisions is now far beyond the remit of quantitative funds alone, and is a critical part of an asset manager’s tool kit when it comes to spotting market opportunities as we move into a hugely tech-driven age.

If you would like to receive similar monthly investment insights, sign up to receive the Fundamentals Newsletter from Old Mutual Investment Group, as well as other newsletters.



Company Snapshot

We're talking about: MINI BUDGET

Finance Minister Malusi Gigaba has laid bare South Africa's economic woes. Visit our Mini Budget Special for all the action.

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

Free education in South Africa is:

Previous results · Suggest a vote