Pictet Asset Management has unveiled its latest offering, the Pictet-Quest AI Driven Global Equities fund, which harnesses artificial intelligence for stock selection within an enhanced index strategy.
The fund aims to target a return of 1.5% above the MSCI World per annum, boasting lower fees compared to traditional active approaches, with a mere 20 basis points management fee.
Amidst forecasts projecting a modest 6% per annum from global equities over the next five years, investors are urged to reconsider their core holdings. Pictet advocates for enhanced indexation as a more robust alternative, emphasising the significance of even a marginal 1% increase in a low-growth equity environment.
The Quest (Quantitative Equity Strategies) investment team at Pictet has crafted a proprietary stock selection model, leveraging machine learning and AI technologies. Eschewing smart or exotic beta strategies, the team relies on well-established and verified datasets to analyse equity markets, striving for transparency in their predictive tools.
David Wright, co-head of Quest, underscored the transformative potential of incremental outperformance, stating, “A 1% after fees difference in the performance of a global equity index annually equates to just under 11% extra return compounded over 10 years.” This highlights the enduring impact of precision-driven investment strategies, he added.
Stéphane Daul, lead portfolio manager, highlighted Pictet’s unique position as a privately owned entity, affording their 20-strong team the liberty to meticulously develop, train, and test machine learning models.
Daul stressed the limitations of existing quant factor investments, particularly during shifts in economic regimes, underscoring Pictet’s commitment to delivering superior outcomes for investors through their long-term approach to investing.
