Faster, Smarter and More Efficient:
Bond Investing Goes Digital

Bond investing hasn't kept up with the rapid pace of technological innovation in the rest of the financial industry. With hundreds of thousands of issuers, trillions of dollars in bonds and a largely over-the-counter trading system, the fixed-income world has long needed such upgrades.

Tackling Data Science in Investment Management

Data science, artificial intelligence (AI) and machine learning are hot topics in investment management as we look for new ways to model investing problems and generate differentiated insights. But data science is also relatively new to the industry.

While the basic premise of investment management hasn’t changed in decades, today there’s a lot more data and it’s coming at us faster and in more diverse formats.

We have better tools and techniques to process and interpret it: faster algorithms, better machines, open-source code and cloud-based technologies. But can AI and machine learning tools synthesize financial data in a way that allows us to extract faster and more differentiated insights?

AI for Everyone

David Kotur | CEO and Co-Founder Curvestone

Turning Big Data into Big Investment Insights

Andrew Chin | Chief Risk Officer of Quantitative Research

Applying Big Data and Data Science

Investment managers are increasingly looking beyond simple linear regression to more advanced ways of modeling investment problems. This has led to data science: a multi-discipline field that applies scientific methods to extract insights from data. Data science includes AI, in which machines imitate human decision-making, and machine learning is one application of AI to solve problems. Of course, big data is the raw input.

Turning Big Data into Investment Insights

One of the major focuses in our centralized data-science team is digging deeper to understand which data and which techniques will optimise and enhance our investment processes.

We know the outcome we’re driving toward solving key investment issues and we know the right questions to ask, so our data team collaborates with fundamental and qualitative analysts the experts in their domains and uses that knowledge to guide our data and exploration modelling research.

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  • Enhance Investment Performance
  • Tailor Trading Algorithms
  • Improve Risk-Management Activities
  • Create Operational Efficiencies
  • Optimise Sales Productivity and Client Interaction

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Tracking the Covid Recovery

Economies are responding and starting to recover from the COVID-19 crisis, with some areas reopening in stages. But the paths to a new normal vary a lot—and are subject to the uncertainty of the virus trajectory. This dashboard uses alternative data to provide an up-to-date visual look at key indicators.

Global and Regional Activity Trends

To get a high-frequency pulse on recovery activity, we’re using alternative data to track three themes: mobility, consumers, and economics. The indicators measure changes from mid-January—before COVID-19 had spread broadly. We also average the three to provide a comprehensive activity measure. Explore the data by changing the date range and geographical focus.

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Through July 8, 2020
Source: Apple, Google, OpenTable, and HomeBase

Related:

Reopening Begins: The Alternative Data Lens | Eric Winograd, 5/25/2020

There's More than “Data” in Data Science

The COVID-19 crisis has made data science even more important. Today, data scientists are collaborating with research analysts to fill in the gaps with a few mouse clicks when social distancing restrictions limit the mobility of on-the-ground efforts.

Crisis Dashboard:
Big Data Helps Paint the Big Picture (Update)

Many investors are looking for emerging signs of a return to normalcy from the coronavirus crisis. While there are many indicators to choose from, we’ve assembled a group of signals, with the help of big data, that may point the way.

Jonathan Berkow, Scott Krauthamer

17 July 2020

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Faster, Smarter and More Efficient: Bond Investing Goes Digital

Bond investing hasn't kept up with the rapid pace of technological innovation in the rest of the financial industry. With hundreds of thousands of issuers, trillions of dollars in bonds and a largely over-the-counter trading system, the fixed-income world has long needed such upgrades.

As bond managers prepared for the digital revolution that’s coming, we are combining technology with human savvy to help solve the market’s most vexing problems and ultimately deliver better outcomes for our clients.

Buying a Bond: Analog Edition

Hover over the hotspots for more information.

Buying a Bond: Digital Edition

Hover over the hotspots for more information.

1
Analysts provide quantitative research and qualitative fundamental research.
2
A series of screens filter the fixed-income universe for bonds that meet certain parameters.
3
Portfolio managers go back and forth with analysts to determine if specific bonds are a good investment or not. The process can take hours or even days.
4
The portfolio manager (PM) chooses the bonds he or she wants to buy and his or her team will manually build the order.
5
A trader calls several different brokers to see if the bonds the PM wants to buy are available in sufficient quantity and at an acceptable price.
6
7
More discussions between analysts, traders and PMs can delay the trade even further or scrap it altogether.
A credit rating and scoring system.
Quantitative assessment tools are used alongside fundamental and liquidity analysis tools.
A dashboard that aggregates multiple external fixed-income trading platforms in one place.
Fundamental Research Prism
Quant Research
Liquidity Analysis (ALFA)
1
Fundamental analysts give quantitative ratings across several different parameters that anyone on the investment team can easily access and compare. The entire investment team can also access a dashboard with multiple feeds of liquidity information.
2
Abbie: A virtual assistant that can do everything from building trades to suggesting potential investments.
3
The PM does the higher-order thinking that humans do best. He or she reviews the list of bonds, considers the overall composition of the portfolio, long-term trends and other factors, and chooses the most attractive options.
4
Once a PM makes his or her determinations, Abbie can build the order in seconds, without the fat-thumb errors even the most diligent human makes every so often.

Abbie finds bonds that meet specific parameters

See how abbie works
See how abbie works

Abbie finds bonds that meet specific parameters

Meet Abbie: The Digital Revolution Coming to Fixed Income

Meet Abbie: The Digital Revolution Coming to Fixed Income

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How Machine Learning Can Help Bond Investors

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Digital Revolution Checklist: Questions to Ask Your Manager

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This is a marketing communication. This information is provided by AllianceBernstein (Luxembourg) S.à r.l. Société à responsabilité limitée, R.C.S. Luxembourg B 34 305, 2-4, rue Eugène Ruppert, L-2453 Luxembourg. Authorised in Luxembourg and regulated by the Commission de Surveillance du Secteur Financier (CSSF). It is provided for informational purposes only and does not constitute investment advice or an invitation to purchase any security or other investment. The views and opinions expressed are based on our internal forecasts and should not be relied upon as an indication of future market performance. The value of investments in any of the Funds can go down as well as up and investors may not get back the full amount invested. Past performance does not guarantee future results.
This information is directed at Professional Clients only and is not intended for public use.

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