A Huge Shift: Big Data and Analytics in the Investment Industry


The big shift toward using quantitative methods in the investment industry is a trend we’ve been following closely at BuildFax.

We recently ran across a great piece by Julie Edde for Bloomberg that highlights some key movement happening in this space. Here are a couple of takeaways:

READ: Struggling Stock Pickers Eye Quant Tools to Gain an Edge

The pressure’s on, but not everybody’s on board…yet.

Edde explains that many firms – including BlackRock Inc., Man Group PLC, and Deutsche Bank – are adding quantitative resources into their research strategies. But a recent survey from Boston Consulting Group reports that of 153 asset managers they interviewed, less than half are utilizing analytics and big data beyond reporting and common analysis.

On the surface, it appears as though this shift is happening at breakneck speed. But could these survey findings suggest there’s opportunity for smaller firms to step up and compete in ways that weren’t possible before?

Active strategies are falling behind.

BCG’s survey also found that the best-performing product categories in the U.S. were passive strategies. This, Edde suggests, may influence stock pickers to try out more quantitative methods.

At the heart of these quantitative strategies is data. And, as a recent Wall Street Journal piece points out, increasingly, alternative data is key. (Of note, BuildFax is listed in this piece as a standout example of alternative data.)

To learn more about how stock pickers are finding an edge through quantitative tools, check out Edde’s Bloomberg article, here.

For more information on how BuildFax property data is helpful for equity traders, contact us today.