Simply put, a look ahead bias is produced when one introduces an informational variable, which may not be available at that point in time to make a decision based on the information at that point in time.
Most Indian companies have their fiscal year end on March 31st. Since the fundamental data is available and provided by Thomson Reuters on a monthly basis, we do not include any information in our study that is not available at that particular point in time in our portfolio construction.
Market Equity (ME) is readily available from the Exchange and Book – to – Market (B/M) ratio is provided by Thomson Reuters on a monthly basis. Thus, we account for the look ahead bias.