Thomson Reuters launches fund manager prediction model
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Thomson Reuters has launched a model that will predict the stocks that a fund manager is likely to buy and sell.
The model will aim to generate “more profitable investment ideas and mitigate risks, giving them an edge over peers”.
According to Thomson Reuters, the StarMine’s Smart model will forecast institutional investors’ future buying and selling behaviour and identify which companies would become increasingly or less attractive to these investors over the following quarter.
Stephen Malinak, global head of intelligent analytics at Thomson Reuters, says: “The main driver in our research was to determine what funds are likely to do next, rather than reacting to what they have just done.
“The basic idea is that we have reverse-engineered fund managers’ stock selection processes to predict what changes they are likely to make in their portfolios based on a comparison of individual stocks to the fundamental characteristics they appear to care most about.”
The model will create a purchasing profile, based on 25 factors, which will then be applied to 40,000 stocks globally.
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