Data revolution, for an efficient use of statistics

4 January 2022

For data revolution to also impact the allocation decision between active management and ETFs, investors should access up-to-date and quality data & analysis

Since the outbreak of the pandemic, the use of data has taken on an even more preponderant role. In 2021, The Economist and then Valerie Plagnol provided us with analyzes to retain for 2022 on the impact of the pandemic on the use and processing of data. Real-time alternative data have a preponderant place in the life of companies and now in that of governments. They definitely offer an opportunity to stop fumbling in the dark by relying on more up-to-date and more qualitative information to make more effective decisions. Nevertheless, there are biases hampering the collection of these abundant data and they need to be filtered. The challenge remain to reconcile big data and the rigor of statistical and scientific analysis.

ūü§Ē We often asked why in the area of ‚Äč‚Äčthe allocation decision between active and passive management, decisions are currently based on simplified data dating from at least 6 months (Cf my previous post). We also often highlighted all the biases included in current analysis in the active/passive fund comparison area : they may use the wrong funds for the investment objective or fail to account for the costs of passive management, they are quickly stale limiting their use to investors, they are based on simplifications and errors….. Those biases prevent investors to make optimal choices between active and passive management and in turn hamper portfolio perfromances. There is currently a gap in the market as investors need the right tools and the right data to to make an informed decision.

ūüí° BSD Investing launched in October 2021 to fill this gap and give investors access to this data revolution. In the area of ‚Äč‚Äčallocation between active management and passive management, investors must also have the right to access up-to-date data and especially quality data to build more efficient portfolios. www.bsdinvesting.com

Marlene Hassine Konqui