Domiciled in Luxembourg, Pictet’s newly launched Pictet-Quest AI-Driven Global Equities fund will target a return of 1.5% (before fees) above the MSCI World per annum, noted a press release from the firm published on 18 April 2024, and will have lower fees than traditional active approaches.
“The rapid expansion of machine learning and AI, combined with improved market data quality, now makes it possible to systematically add incremental outperformance that can have a profound effect in the long term,” commented David Wright, co-head of Pictet Asset Management’s quantitative equity strategies (Quest) investment team, in a press announcement.
The newly launched fund--“an enhanced indexation strategy”--will use artificial intelligence to pick stocks, said the communiqué. According to Investopedia, “enhanced indexing” is a that mixes elements of active and passive management. It aims to boost the returns of an underlying portfolio, outperform “strict indexing” and minimise tracking error.
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At Pictet, the firm’s quantitative equity strategies team has developed a stock selection model to forecast returns, using established data sets to analyse equity markets.
“We believe the existing quant factor investments offered by the broader industry have limitations, particularly when changes to the economic regime occur,” added Stéphane Daul, lead portfolio manager.
As of 29 February 2024, Pictet Asset Management managed €254bn in assets and had 18 business development centres around the world, including in Luxembourg.