Alternative Data in Active Asset Management
19 Pages Posted: 21 Aug 2024
Date Written: July 25, 2024
Abstract
Alternative data are data gathered from nontraditional sources beyond company filings and analyst research. Alternative data are crucial in investing, offering unique insights and competitive advantages. The demand for alternative data has skyrocketed in the past two decades, due to the regulatory changes and the growing importance of intangible assets such as intellectual property. Alternative data cover various sources, including firm-released information, government-released information, information about investor attention and trading, and third-party information. However, alternative data landscape is constantly evolving due to alpha decay, technological advancements, regulatory changes, and market efficiency. These challenges require investors to continuously adapt their strategies, discover new data sources, and develop sophisticated analysis techniques to maintain an edge in an increasingly data-driven financial world.
Keywords: alternative data, investment, active investing
JEL Classification: G10, G11, G12
Suggested Citation: Suggested Citation