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Fund managers pride themselves on giving their investments a distinctive intellectual stamp. Would many of them be pleased with this back-handed compliment from economist John Maynard Keynes?

“Professional investment may be likened to those newspaper competitions in which the competitors have to pick out the six prettiest faces from a hundred photographs, the prize being awarded to the competitor whose choice most nearly corresponds to the average preferences of the competitors as a whole,” Keynes writes. “It is not a case of choosing those which, to the best of one’s judgement, are really the prettiest, nor even those which average opinion genuinely thinks the prettiest. We have reached the third degree where we devote our intelligences to anticipating what average opinion expects the average opinion to be.”

The logical extension is if an asset manager has information on a company that will not also influence the buying habits of its peers, that information may be useless in predicting future trends.

This classic concern has arisen again in the face of a new hedge fund launch from Four Capital Partners. The YouGov Alpha fund uses proprietary research from pollsters YouGov to get up-to-the-minute public opinion on UK-listed companies. But if this type of information does not feed into an average opinion of a stock, or of “what average opinion expects average opinion to be”, what use is it in anticipating changes to the share price?

Four Capital co-founder Chris Rodgers explains YouGov polls are good leading indicators of high street behaviour, especially where voting is concerned. “Investors are always looking to get one up on the market,” he says. “This isn’t the first time market research has been used to inform investment researchers, but this is the first time it has been central to a fund’s investment process.”

The relationship between corporate strategy and customer opinion is undeniably crucial to a company’s success. The question is how much value UK consumer indicators can add to investments in the UK’s globally diversified stock market. Publicly available consumer confidence indices constitute one of many top-down indicators of regional economic activity. Given that so many UK stocks have overseas earnings, how central can UK consumer research be to anticipating returns?

Some companies conduct proprietary surveys of consumer demand, but complement them with considerable supply chain research. American asset manager Janus Capital Group has nine associates who review customer opinion, but its analysts also visit crucial industry assets. It also values the opinions of middle management responsible for the company’s day-to-day operations. As Janus fund manager Jim Goff puts it, the value of information from an employee at one of the companies he is analysing is usually inversely proportional to their rank.

For Mark Connolly, executive director of distribution and client service at Standard Life Investments, useful proprietary information is simply anything that identifies market change earlier than competition. He does not feel the market is ignorant about any driver in particular, although he observes some sectors are better covered than others.

“If you think about UK small-cap investment, these companies are not well covered by the research community, so the value of proprietary analysis is higher than for a FTSE100 company,” he says. But he confirms such information is only helpful if it anticipates trends within the medium term. “If you’re right early, then you’re wrong.”

As Keynes explains, medium-term outlooks take guts. “It is the long-term investor, he who most promotes the public interest, who will in practice come in for most criticism, wherever investment funds are managed by committees or boards or banks,” he writes.

“If he is successful, that will only confirm the general belief in his rashness. And if in the short run he is unsuccessful, which is very likely, he will not receive much mercy. Worldly wisdom teaches it is better for reputation to fail conventionally than to succeed unconventionally.”

And if a manager’s outstanding new research makes risky assumptions, it may not be long before the novelty starts to pall for investors.

Nick Rice is features and supplements writer at Investment Adviser