In a supplement to our Alpha Lifecycle research, we find that disciplined active managers who are able to exit positions at or near the peak of their alpha curve can preserve more than 120 bps outperformance (net of fees), per year, vs index funds.
Fund managers need to think outside the machine learning "black box" if they want to get the most from this powerful advance in analytical capability. Market data is simply too complex and noisy for the kind of predictive big data being used in other sectors.
Former PM and buy-side thought leader, Jason A. Voss, considers how the industry will evolve over the next 7-10 years, and the change that's needed to develop a new breed of successful active manager.
We talk to Chris Woodcock, Essentia's new Head of Product. He reveals his early career as a professional football player and explains why buy-side software is always better when it's built by people who have been portfolio managers themselves.
If you watched Wimbledon this year, you'll know that data-driven insights and analysis are fast becoming part of the tennis landscape. Guest blogger John Quartararo takes a closer look at the ways the world's best tennis players and their coaches are using technology to improve performance, and considers how it applies to the investment world.
Despite the hype, artificial intelligence is not yet capable of replacing human fund managers altogether. Indeed, a new categorisation of AI - augmented intelligence - is fast becoming the secret weapon of enlightened investors. We review how they're doing it.
The investment management industry has traditionally placed a lot of emphasis on time as a teacher. Will the trend towards juniorization undermine this skill base - or is this an opportunity to reinvigorate active management with new blood that's more attuned to data-driven learning?
It's easy to postpone change - especially in a difficult market environment. But now is the time for active managers to make better use of the new technology now available to them, and level the playing field with the growing sources of competition.
We talk to Snežana Pejić PhD, Senior Quantitative Researcher at Essentia's London office. She tells us why crunching investor performance data trumps a life in academia, and how the new union between technology and behavioral science is helping people to become better investors.
Speculation is increasing about Google’s ambitions in the asset management space. In this article, Eric Rovick argues that the real threat is not Google’s technology, but its culture and a willingness to focus on process and behavior. Today’s asset managers would do well to learn from this approach as more new entrants enter the market.