Introduction
The first light of day illuminates the room as the sound of the sea filters through my dreams, courtesy of an app I recently downloaded to wake me up with pleasant sounds. Waking up, my hand reaches for the cell phone. I check my messages instead of morning calls and dive into the day's news. I discover that the last glass of milk in the refrigerator has run out. While I eat breakfast, I make a purchase on Amazon Prime, attentive to the endless offers.
Ready to face the day, I get ready and leave the house. Along the way, social media claims my attention, trapping me with ads for tempting products. Before giving in to temptation, I check Skyscanner to check flight prices to Morocco and explore accommodation options. I decide on my Friday dinner after checking the reviews on Tripadvisor, making a reservation at a Thai restaurant. Finally, I arrive at my workplace, where data flows like a growing river.
How much data do we produce and consume?
According to a recent study by Cumulus Media, in just 60 seconds, the digital world shakes up: 900,000 Facebook accesses occur, 46,200 Instagram posts are shared, and 15,000 GIFs are exchanged via Messenger. Consumption of online streaming platforms has reached new heights since 2016, with 4.1 million videos viewed on YouTube, 40,000 hours of music played on Spotify, and 3.5 million searches on Google.
Meanwhile, e-commerce is booming with $1,471,522 being spent, 16 million text messages being sent and 156 million emails being distributed. Domo’s “Data Never Sleeps” report reveals that more than 2.5 trillion bytes of data are generated on the internet every day, fueling the growing demand for big data analytics across a range of industries.
The areas covered by 'Big Data'
“The capital allocated by large global companies (and not so large) to understand their customers and their behavior has seen continuous growth in recent years. In the ability to optimize, extract and use the information that comes from those 'big data', lies the investment opportunity that we see in the long term,” says Jacques-Aurélien Marcireau, senior portfolio manager at Edmond de Rothschild Asset Management.
Jacques-Aurélien Marcireau, Senior Portfolio Manager at Edmond de Rothschild Asset Management.
But how can this trend be turned into a competitive advantage in the investment field?
“The fundamental key lies in identifying those companies that, in each sector, are capable of taking advantage of the use of 'big data,'" says Jacques-Aurélien Marcireau. “For example, in the long term we estimate that more than 70% of the health sector will be influenced by this use of information. More immediately, the fields of information technology, telecommunications, energy or finance are more advanced in terms of the ability to exploit this data,” he continues.
The expert is confident that those companies that place 'big data' at the center of their development strategy will be the winners of tomorrow. Some examples of companies that are already doing this, and that are therefore good investment alternatives, are Google, Nasdaq, JP Morgan, Orange, Axa or Randstad. “The business opportunity does not lie solely in technological values, but in those that use them to process all types of data, from banking and insurance to transportation, automotive companies or even, in the longer term, medicine,” it states.
“The key lies in being able to properly take advantage of data, always in accordance with existing regulations, to generate new goods and services that give competitive advantages to these companies,” explains Jacques-Aurélien Marcireau. The business opportunity does not lie solely in technological values, but in those that use them to process all types of data. Have the assistance of teams of experts in various fields who thoroughly investigate and evaluate reports from companies and organizations, sector studies, conferences, economic indicators and even interactions on social networks and internet searches become practically indispensable when it comes to finding value in the field of 'Big Data'.
A fund to invest in 'Big Data'
In this perspective, the Edmond de Rothschild Fund Big Data It is a thematic fund with a transversal focus that seeks to be a vehicle destined to take advantage of this digital and technological revolution. “This is achieved through active management, with a clear long-term 'value' focus, and selecting those companies that offer potential in the infrastructure sector, in listed companies with business in the analytical part and, above all, in those non-technological companies. who perceive in the use of this 'big data' the way to obtain a competitive advantage,” explains Jacques-Aurélien Marcireau. The strategy proposed by the Edmond de Rothschild Fund Big Data is long-term, which implies having a time horizon of more than five years.
Its profitability objective seeks to exceed the MSCI World Index. To this end, the strategy focuses on the selection of this type of technology and 'Big Data' exploitation companies, while carrying out portfolio management. The fund was created in August 2015 and the accumulated data at the end of 2018 showed a return of 28,65% compared to the 19,15% achieved by the MSCI World. In this period, its volatility has been 11.46 compared to 8.91 for the index. The Sharpe ratio readings show a three-year value of 0.79 compared to 0.71 for the MSCI World. So far this year, the data indicates an increase of 4.15% compared to 4.78% for the MSCI World.
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