New research(1) from quant technologies provider SigTech reveals there is a growing focus among fund managers on improving the quality of data. 77% of managers interviewed believe that to achieve above-average returns in the future, accessing high quality data and having the technological capabilities to process it efficiently is becoming increasingly important.
This explains why 76% of fund managers surveyed expect to increase their budget for data over the next few years, with one in five (20%) expecting a dramatic increase.
The number of available data sources has exploded over the last couple of years and 84% of fund managers work with at least four different data vendors. However, nine out of ten fund managers find the process of evaluating data, ensuring it meets quality standards and negotiating with data vendors challenging.
Fixed income (58%) and equities (50%) are the two asset classes fund managers say they experience the most difficulty in accessing high quality data. Quant fund managers find it most difficult to source high quality data for forwards (59%), followed by cash/spot (57%) and then futures (46%).
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In the fast growing segment of alternative data, to successfully interact with fund managers, 84% of those surveyed believe data vendors need to provide data in a format that allows for rapid integration into in-house systems. Furthermore, the research suggests the importance of access to data that is pre-mapped and harmonised will increase.
Daniel Leveau, VP Investor Solutions at SigTech, comments: “With quantitative investment strategies becoming more sophisticated, fund managers’ use of data is increasingly complex. This leads to growing levels of outsourcing to specialist service providers, allowing fund managers to increase their focus on core activities.
Our research shows there is significant room for improvement in terms of the quality of data provided to quant fund managers. Presenting a huge opportunity for data vendors and technology providers, by offering data that is clean, validated and operationally ready.”
Read the rest of the findings in SigTech’s Financial Data Impact Report 2022
(1) SigTech commissioned the research company PureProfile to interview 100 systematic hedge funds and quant asset managers across North America, Europe and Asia Pacific. The survey was conducted online in February 2022.