IHS Markit Expands Alternative Data Offering
IHS Markit, a world leader in critical information, analytics and solutions, expanded its alternative data offering for asset managers with the launch of new stock selection and strategy signals covering the automotive sector.
Covering more than 30 auto manufacturers worldwide and providing more than 10 years of historical data, the 32 new factors are designed to assist in the prediction of stock returns using analytics derived from company-specific datapoints on sales, production and market share. They include multiple financial factors for revenue and sales as well as novel factors covering production of electric vehicles and plant utilization.
Analysis by the Research Signals service at IHS Markit finds positive alpha in several of the factors, including, at times, a return spread of up to 1.41% for the Monthly Trend in Production Growth factor and up to 2.64% return spread for the Monthly Trend in Sales Growth factor.
“Quantitative and fundamental investment funds are deeply interested in the unmatched scope and quality of alternative data produced by IHS Markit covering virtually every industry sector,” said David Riehl, executive director in the equities data and analytics group at IHS Markit. “Using our rich datasets in automotive to create these new factors expands our library to more than 600 signals and models and gives investors unique tools for assessing one of the world’s most important sectors.”
Data inputs for the signals are mined from robust statistical automotive datasets from IHS Markit that include vehicle sales and production history, aggregated registration information, manufacturing volumes and vehicle pricing insight for multiple geographies.
According to Greenwich Associates, 50 per cent of institutional investors are planning to increase their usage of alternative datasets.
Automotive data joins several other alternative datasets already deployed in the Research Signals factor library. Stock selection and strategy signals and factor models derived from alternative datasets include:
- Social media sentiment: 22 factors derived from Twitter data from Social Market Analytics
- Environmental, social and governance data: 23 factors derived from 250 ESG performance indicators
- Credit risk: four alpha and risk factors using IHS Markit CDS data
- Cybersecurity: 16 factors using cybersecurity ratings from BitSight on 3,000 companies
- Short squeeze: 11 factors for squeeze risk derived from IHS Markit’s leading data on stock loan supply, demand and the cost to borrow stock
- Dividend forecasts: 8 factors derived from dividend forecasts on 8,000 stocks
- Industry specific: 100+ factors and 8 models covering banks, insurance, oil & gas, semiconductors, retail and airlines
“Investment managers understand that alternative datasets can provide perspective not present in market data and financial statements,” said Riehl. “The challenge for most is turning data into actionable insight. While some firms consume our raw data, many others prefer us to deliver our expertise in sourcing, structuring and validating alternative data through prepackaged analytics like the new automotive signals.”
Research Signals delivers valuable investment insights through a comprehensive library of more than 600 global stock selection and strategy signals. The service covers more than 30,000 securities across 80 countries. It extracts valuable investment insights from a broad range of raw financial and industry-specific data sources to enable customers to assess intended and unintended exposures across investment themes.
Source: IHS Markit
The not-for-profit initiative will make it easier to ensure funds are comparable and clear about costs.
Most buy-side firms miss alpha-generation opportunities by not using granular ESG data.
The acquisition reinforces Schroders’ private assets and real estate capabilities.
ICS, a digital platform provides transparency and comparability of the impact of investments.
Buy-side trading head has somewhat warmed up to the notion of trading from home.