Alternative Data News and Insight

The growth of ETF investments has coincided with the growing sensitivity of emerging market capital flows to global financial shocks. To date, the majority of studies on the subject have focused on the importance of ETFs relative to competitive instruments (e.g. mutual funds). However, only a few have examined the correlation between emerging market ETF flows and global financial shocks. We review a study that examines the role of ETFs in transmitting global financial conditions to emerging market economies.

As the risk of stagflation in Japan has risen, some funds have shown interest in estimating the results of Shunto – the wage negotiations between corporations and unions that take place every March. Several data vendors are preparing to offer products that capture significant changes to inflation and wages. This report reviews studies that use corporate financial, governmental and job listings data to monitor the Japanese labour market.

The full scope of ChatGPT’s application within the financial industry has yet to be realised. In this literature review, we review a 2023 paper assessing ChatGPT against other GPT models and other sentiment providers. This paper focuses on ChatGPT’s ability to predict stock returns using sentiment analysis.

Unlike their public markets counterparts, venture capital investors can be hindered by a lack of data to help inform investment processes. Several venture-oriented platforms have materialised to fill this void, providing numerous metrics with varying relevancy. We summarise a study that uses machine learning to identify the most relevant factors for early-stage venture capital investors.

Text is an underexploited data source for understanding asset markets. So far, academic research has studied only a tiny fraction of market-relevant text data and often focuses on a single specialised data source. As a result, text information is often represented in rudimentary ways. This report summarises a study that aims to improve stock-return prediction models by extracting contextualised representations of news text derived from large language models (LLMs).

The return of high inflation has revived the economic trauma of the 1970s concerning wage-price spirals. To compare the current conditions of inflationary pressure, we summarise a working paper by the IMF that studies the impacts of wage-price spirals on inflation. We also highlight alternative sources of relevant economic data, including salary information, that offer timely insights into wage growth and the current macroeconomic climate.

This literature review summarises a recent paper on comparative performance persistence across PE investment strategies (buyout versus venture capital) in the US since 1984. We examine the underlying data in the study and assess the applicability of other datasets in understanding managers’ interim and final performance, based on internal rate of return, multiple on invested capital and public market equivalent benchmarks.

Almost 3bn of the world’s population still lacked access to and use of digital technologies in 2021. We review a recent study that explores whether investing in shared telecom infrastructure – particularly where independent companies own towers and lease them to network operators – could improve digital connectivity in some developing nations.

The potential uses for ChatGPT have grown as rapidly as its popularity. We summarise a 2023 paper that explores how the technology can assist with financial research, particularly for generating ideas and identifying data.

Current expected credit loss (CECL) is an accounting standard introduced to mitigate banks’ potential losses. But some financial industry professionals believe that implementing this model could raise interest rates and reduce credit access to consumer loans. In light of these claims, we look at a study that assesses the CECL's effects on credit access and pricing.