Data Trends for Investment Professionals

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Capitalizing on ETF data: In conversation with Atom Finance

Atom Finance turned to Nasdaq APIs for ETF and fund data to help fuel their research platform. Learn more about their experience with Nasdaq’s data.

If you were an investor in the 80s, chances are good that you couldn’t do without a Bloomberg Terminal. The system burst onto the scene in 1982 and has remained in the investment industry’s toolkit ever since, alongside an ever-growing collection of datasets and analytics tools that help investment professionals make well-informed decisions.

Data used to be a tool accessible mostly to the well-funded investor. Now, data and other information is available to investors of all types via a myriad of platforms. Increasingly accessible, data is here for the long haul, but the concept of more and more information is not without its challenges.

In the case of ETF data, institutional investors may have access to data that is confined to a terminal or an otherwise inflexible format—a marked disadvantage for many investing use cases. Many individual investors don’t have access to the data in the first place. For those who have access to the relevant data, questions remain about its accuracy, timeliness and origin.

Positively, the ETF industry is seeing a trend of growing data standardization. As a leading provider of data to investment professionals, Nasdaq’s Quandl has witnessed this trend take root in real time.

“ETFs are at that stage right now in that a lot of ETFs offer fabulous economic opportunities but the data side is not as mature as the product side with no harmonized reporting, or even a defined line between active and passive,” Abraham Thomas, Chief Data Officer and Co-Founder of Nasdaq’s Quandl, said in an interview with ETF Express.

“As ETFs become more commonly used, they will want harmonized and standardized data which is legible for institutional investors. It’s still a work in progress.”

Institutional investors will undoubtedly benefit from this evolution towards standardized, reliable and accurate data. But what about individual investors and those who can’t afford the same price tags as asset managers?

Enter Atom Finance, an investment research platform that brings institutional-quality data and tools to its users. They leverage Quandl’s ETF Global Constituents data feed to help democratize access to information for their users. We spoke with Adam Baitch of Atom Finance about the platform’s mission, their high data standards and why they went with Quandl’s offerings of ETF data.

Leveling the playing field

Atom Finance is founded and run by industry veterans, so they knew that ETF data was valuable to many investors, including their own user base of individual investors.

“Financial data has become more commoditized in recent years, yet financial platforms themselves have lagged behind. Platforms still generally don’t offer full ETF holdings to the consumer, but we’ve found that it’s now possible and even economical to do this,” explained Baitch. “We want to give users access to data that will help them make informed decisions.”

The research platform provides its users with resources such as real-time quotes, fund data via the Nasdaq Fund Network, brokerage integration and professional news sources to help even the playing field between them and Wall Street. The company is committed to the democratization of information in the investment industry, so when the need for high-quality ETF data arose, the company undertook a comparative evaluation of potential providers.

Finding the right data provider

In an information-rich environment, it’s important to choose the right data providers. As Thomas said in his interview, “Customers like institutional products that are well documented, follow clear and understandable guidelines rather than something more opaque.”

Atom Finance wanted nothing less than high-quality data for their user base. To that end, they developed a checklist for what they were looking for in a data provider: data accuracy, data completeness and platform reliability.

“Firstly, we asked: does this [data] match other publicly available resources such as quarterly filings?” shared Baitch. “How quickly is it updated and is it reliable? In terms of completeness, different providers have different column sets, and we wanted to have the most useful data for our customers.”

ETF Global Constituents product contains a comprehensive set of full holdings data for over 2,000 US listed ETFs. The data points reflect the actual holdings of these ETFs including cash, derivative and short positions.

The final piece of the puzzle? For Atom Finance, it was about platform reliability and developer friendliness. Quandl’s API-based integrations were a key advantage.

Leveraging ETF data

Atom Finance’s premium users have access to full holdings data via the platform and basic users can access a limited subset. The platform offers users high-quality information previously accessible only to Wall Street professionals, including in the ETFs space.

“We plan to offer a proprietary feature called Fund Lookthrough that will use the [ETF Constituents] data and show users which stocks are in the funds that they’re holding,” said Baitch. “They can then have a better sense of what they’re really exposed to.”

Leveraging ETF Global Constituents data was the next step in the platform’s mission to make the inaccessible, accessible for all. With ETFC data integrated with Atom Finance’s offerings, Baitch notes that it’s a “more complete platform, meaning happier customers.”

“Quandl has a lot to offer—flexibility, customer satisfaction and the ability to build new features.”

Nasdaq and Quandl provide a host of solutions available via API to fuel fintech innovation. Learn more at Nasdaq NextGen Solutions.

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