ESG Signal Enables Global Outperformance, Truvalue Labs' Backtest Shows
Thursday, October 24, 2019 10:30 AM
Expanded coverage in 12 languages powers new ESG Activity Signal
SAN FRANCISCO, CA / ACCESSWIRE / October 24, 2019 / Truvalue Labs™, the pioneer in AI-driven environmental, social, and governance (ESG) data, today announced the results of a new research study that finds significant annual outperformance versus numerous global benchmarks over a 12-year period, due to ESG data sourced from publications in 12 languages.
This study finds the outperformance shown in previous studies of large cap benchmarks also extends to a wider variety of benchmarks, including mid-cap and small-cap stocks across developed and emerging markets. The results come from Truvalue Labs' latest proprietary dataset, which mines large volumes of unstructured data in a dozen languages from international, national and local news, NGO reports, trade publications, and social media content on more than 16,000 securities. Truvalue Labs' ESG Activity Signal, which combines Truvalue Labs' Insight and Volume signal, produced long-short quintile spreads of approximately 4% annually.
"Companies with positive ESG-related news on high data volume relative to expectations tend to outperform," said Dr. Stephen Malinak, Chief Data and Analytics Officer for Truvalue Labs. "The best longer-term shorting opportunities-and the riskiest companies to exclude from a long-only strategy-are companies with negative ESG data that is not yet broadly disseminated. Combining our Volume and Insight Signals this way into an ‘ESG Activity Signal' provides a robust longer-term screening, trading and indexing strategy that works across a very broad range of stocks."
The study, "Performance Tests of Truvalue Labs Volume, Insight, and ESG Activity Signals," examines the historical performance of global portfolios constructed with Truvalue Labs' data. Truvalue Labs' ESG methodology objectively incorporates both positive and negative company actions calculated in real-time and thereby provides investors with more timely, actionable information for investment decisions.
"The study confirms that our ESG data provides actionable information worldwide, across many different languages on companies of all sizes," said Hendrik Bartel, CEO and co-founder of Truvalue Labs. "As we continue to expand our AI data processing engine, we see broader applicability and more efficient customer adoption."
To learn more, please register to join Truvalue Labs' upcoming webinar on "Finding Alpha in a New Global Dataset using SASB's Standards" on Wednesday, October 30th.
About Truvalue Labs™
Truvalue Labs is the first company to apply artificial intelligence (AI) to uncover timely and material Environmental, Social, and Governance (ESG) information at scale. The company's mission is to deliver increased transparency to investment professionals by providing data and analytics that go beyond traditional fundamentals. It is backed by investors including Series A round lead Katalyst Ventures, based in San Francisco. The award-winning products, Truvalue Platform™, Truvalue Data™ and Truvalue Cloud™, deliver investable insights by revealing value and risk factors from unstructured data at the speed of current events. Visit www.truvaluelabs.com to learn more about the SaaS and API products.
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SOURCE: Truvalue Labs