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Blog Title: The Value of Alternative Data Metrics in Investment Decisions

Introduction

In today's rapidly evolving investment landscape, portfolio management teams are increasingly turning to alternative data metrics to gain valuable insights and make informed investment decisions. This article explores the use of alternative data in two specific cases, highlighting the benefits it brings to portfolio management teams.

Case 1: "Common Prosperity" Push

In the first case, a company experienced a significant increase in spending from its largest customer cohort, female midlevel wage earners. This increase in spending as a percentage of disposable income was identified through the use of alternative data metrics. The company's data science team transformed this information into an investible insight, enabling the portfolio management teams to maintain ownership in the stock.

Case 2: New Retail Product

The second case focuses on a leading asset manager and their new retail product. The portfolio management teams believed that investors were underestimating the growth potential of this product. To track and monitor the product's performance, the teams used regular asset flow data provided by the company, as well as an alternative method developed by the data science team. This alternative method involved tracking and monitoring traffic on the web portal of a specific retailer. The analysis of this data contributed to the portfolio management teams' decision to invest in the asset manager's new product.

Conclusion

These cases demonstrate the value of alternative data metrics in making investment decisions. By utilizing unobvious data insights, portfolio management teams can gain a competitive edge and make informed choices about their investments. The integration of alternative data into investment research processes allows for a deeper understanding of companies and their potential for growth. As the investment landscape continues to evolve, the use of alternative data metrics will become increasingly important in driving successful investment strategies.

Published on: October 15, 2022