UK- Investors paying attention to salient information can easily overlook data that provides a broader perspective on corporate and stock market performance, claimed a new report by the Universities Superannuation Scheme.
The report, Enhanced Analytics for a New Generation of Investor: How the Investment Industry Can Use Extra-Financial Factors in Investing, looks at the role extra-financial factors can play in the determination of stock prices.
Such factors are those likely to have a long term effect on business results but that lie outside the customary span of variables used by some analysts, according to authors James O’Loughlin, of JOL Consulting, and Raj Thamotheram of USS.
The authors argued the enhanced analystics initiative (EAI) aims to address this problem by making extra-financial factors more evident to investors.
The paper shows the EAI encouraging the emergence of a new generation of investor - a generation that is better informed and confident of the role that extra-financial factors can play in corporate performance and in the determination of stock prices.
O’Loughlin and Thamotheram’s report also calls for other players in the investment chain to join fund managers in an informed partnership. They claimed that this new breed of investor will set the next benchmark for their peers in the investment management industry.
By Angele Spiteri Paris
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