As costs for benchmark index data rise, managers need to extract more value from that data, suggests new research from Greenwich Associates.
The U.S. research firm reports that its survey of 86 executives, representing North American asset managers, finds that benchmark index data is crucial to the investment process for active managers.
“More than 80% of the active managers participating in a new study rate index benchmark data as an important part to their businesses,” it said.
Yet, it also finds that the cost of that data has increased over the past couple of years, and that active managers are now questioning whether the value justifies the cost.
For instance, Greenwich reports that almost half of asset managers are interested in utilizing index data to generate “original research that supports managers in making complex investment decisions.”
“There is considerable room for index providers to add value by creatively using their wealth of data, analytics and intellectual capacity,” said Richard Johnson, principal for Greenwich Associates.
“One of the most interesting findings to emerge from the study is asset managers’ desire to partner with index providers at an even deeper level beyond the core benchmark business,” he added.