Using Search data and Share of Search analytics in the fund industry

The fund industry is generally a slow moving industry. Once people have invested money into a fund, it generally stays there for quite a while. Losing a client is therefore one of the worst things that can happen to a fund manager, who can use Share of Search as proxy to predict their future movements in market share.

Conclusion:

• All brands showed a clear correlation between market share

• The lag between the Share of Search and the movements in “net assets under management” was about 6-11months. This basically means that it will take in between 6 and 11 months to see movements in the funds money flow since the movement in Share of Search.

• The correlation coefficients we encountered went as high up as 0.947 with a 7 month lag.

This particular industry shows the particular predictive potential of Share of Search as a metric for slower moving industries.

Funds vs “net assets under management” showing a 0.947 correlation coefficient with a 7 month lag

Background and methodology:

For this research had access to the Swedish pension funds data providing us with an overview of the funds net asset flows. This basically monitors the inflow and outflow of money in the funds.

Out of over 800 Swedish pension funds, we randomly selected 32 funds for which we ran Share of Search data based on total search volumes. Given the straight forward nature of the fund industry, we used the direct search volumes on the fund names and didn’t use rolling averages. Those share of search volumes were then correlated with the flow of net assets in the various funds.