Axa IM adds news analysis to investment strategy
Axa Investment Managers has begun using data analysis of news articles in a bid to better assess the performance of its stocks, according to the Financial Times.
The fund house, with €666 bn ($737.6 bn) in assets under management, is trialing a system to track news announcements while reportedly also ‘in discussions with a San Francisco-based data analytics company to help it beat the market and give it an advantage over competitors,’ says the paper.
The move is very much about cost effectiveness, Jeremy Baskin, chief executive of Axa’s €19bn quantitative investing arm, Axa Rosenberg, tells the FT.
‘What has changed — and this is what is different about the environment that we are in right now with big data — is that natural-language analytics and technology are just cheaper and more readily available,’ he says.
While the use of big data might be in the early stages, BlackRock, the world’s largest fund house with $4.6 tn in assets, hired Bill MacCartney, a former senior Google research scientist, as a managing director in June last year to help apply predictive models to BlackRock's quantitative investing. Reports of a possible joint venture between the fund house and the search engine emerged months later.
Two firms offering data analysis told the FT that such services are popular. RavenPack estimates that 70 percent of quantitative hedge funds now analyze news in some form, while Selerity claims that analysis of social media posts is proving even more popular with three-quarters of asset managers saying they use Twitter as part of their investment process on a daily basis, according to a survey the firm commissioned.
Skeptics remain, however. ‘Big-data tools just track what happens and do not ask for the reason why things happen,’ says one commentator from Berenberg Bank.