HSBC launches first multi-asset index driven by AI and big data
Drawing on both traditional sources of financial information and modern outlets such as social media posts, AiMAX is the first rules-based multi-asset investment strategy to use AI to construct diversified growth portfolios.
AiMAX builds the portfolios by developing intuition from historical data and learning from new information as it emerges.
The index invests across 15 asset classes and five investable asset types – developed equities, developed bonds, emerging markets, real assets and inflation assets – and a cash index.
“This is a new approach to multi-asset investing that combines cutting-edge AI techniques and a time-tested diversification strategy to balance risk and return,” says David Odenath, head of quantitative investment solutions, Americas at HSBC Global Banking and Markets.
“By using AI and big data to improve the accuracy of our capital markets assumptions, we are able to deliver a next generation asset allocation strategy to our clients.”
HSBC’s AiPEX, the world’s first AI-powered stock index family using IBM Watson, went live in August 2019. Since then, the AiPEX Total Return Index (AIPEXTR) has outperformed the S&P 500 Total Return Index by 4.79 percentage points.
The bank claims that, based on simulated and historical returns as of 26 February, 2021, AiMAX would have performed above the S&P 500 Price Return Index with “significantly less volatility and more diversification” during the prior 15 years.