Can nowcasting unlock factor timing?

Fulcrum Asset Management is running tests to see if fresher data can help improve factor allocations

Fulcrum Asset Management is considering integrating the nowcasting used by its macro business into its systematic risk premia strategies in an attempt to dynamically weight factors.

The firm’s discretionary portfolio managers have long used real-time tracking estimates, or nowcasts, to gauge the state of the economy as new information arrives. Nowcasting is increasingly used by asset managers to get access to the very newest data, as opposed to waiting for quarterly government GDP statistics.