Companies with a high level of preparedness for working remotely outperformed the MSCI USA Investable Market index for the year through June 30, shows a study by MSCI.
The index provider constructed four hypothetical portfolios based on what it labeled the "remote operational capability" factor — a company's ability to shift toward remote working, digitization and low-contact transactions and services. The 250-stock portfolios were constructed using machine learning and language processing techniques.
One portfolio focused on word counts — the number of ROC-related keywords included in the business section of a company's 10-K filing. The second, a "semantic search," identified products and services of a company and then counted ROC-related keyword matches within those findings. A third portfolio quantified a company's exposures to themes related to the ROC keywords; and a fourth portfolio combined the three approaches.
Within the portfolios, MSCI found a heavy weighting toward the technology and communications sectors, while financials had the lowest weighting.