Big investors are increasingly making use of big data, where large amounts of data to be analyzed in order to distill trends.
Valentijn van Nieuwenhuijzen flips open his laptop on the first trading day of this year, he sees immediately that something unusual is going on. The figures Market Psych, the system that NN Investment Partners measures the sentiment in the market come in. Articles on innovation score higher than average in the digital media, but more importantly, words that are associated with stress and (Gloom) dominate the digital domain, just as the term.
The main strategy of the Dutch asset manager with eruo 187 billion under management decides to step on the brake, he unscrews the equity investments back and keep more cash on. That week shoot investors indeed stressed: go global stock markets sharply down and the Amsterdam AEX index will experience the worst first week of the year yet.
Trends distill
Big investors are increasingly making use of big data, where large amounts of data to be analyzed in order to distill trends. "Actually, we try to predict human behavior," says Richard Mathieson, director of the Scientific Active Equity team at BlackRock.
The world's largest asset manager in the world ($ 4,600 billion, converted some & euro; 4,200 billion) has been involved since 2008 engaged in the investment process and in San Francisco, the Mecca of the tech industry, a team of 25 data analysts put to work. BlackRock makes like NN using language analysis to measure sentiment. With special software are news sites, social media and other relevant sources scanned for words related to a positive or negative sentiment. That may be about a company or an industry, but also a political event that the FINANCE can put in motion le markets. For example, the debate on a brexit, a departure from the United Kingdom from the European Union. Since June 23, a referendum held on.
Information Value
At this time point the polls in the UK on a neck-and-neck race between supporters and opponents, "said Mathieson. "But our analysis shows messages on Twitter that a majority prevailed that the UK remains in the EU." Mathieson has not taken a position yet on this information. "Therefore, the market is too volatile and we do not rely on . N analysis
"It is an additional resource, not d & eacute; source "also emphasizes Van Nieuwenhuijzen of NN. How the data on digital media weigh in a decision, since the main strategy has no hard figures. & Lsquo; Cause you never know what you decided in the scenario if you had not had that knowledge. But it adds 10% to 20% of information value. Information that is only input for the final decision.
Knowledge production
NN Investment Partners uses the system about two years. For the much larger APG (& euro; 405 billion under management) began the experiment with big data in 2011. "Within five to ten years, investing using big data commonplace," says Ronald van Dijk, Managing Director at APG. "We now need to build knowledge about this way of investing."
APG has no special team for big data, but the asset that has the largest pension fund in the Netherlands (officials ABP) as its main customer, it frees up time for staff for this trend. They're especially when the team is already engaged in investing with computer models based on old-fashioned data such as macro data and analyst reports. This part of APG invests & euro; 60 billion.
Van Dijk says that the computer he uses to investment risk mapping 5% has become more accurate by using big data. According to him, the investment world only at the beginning of the big data revolution. "Many investors look at macro figures such as inflation and the growth of gross domestic product (GDP) in the previous quarter. But that's looking backwards. The data on, for example to analyze purchases on the internet you can find out what is happening now, what the sentiment is."
Read the full article at fd.nl (account required)