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Pictet Asset Management has announced the launch of an AI-focused hedge fund in the latest addition to its $7bn Total Return range.
Pictet TR – Quest AI is a global equity market-neutral long/short strategy that harnesses next-generation artificial intelligence for stock selection, according to a statement from the Geneva firm.
It employs AI in a factor-neutral long/short strategy, aiming to deliver pure alpha to investors.
Pictet Asset Management’s “Quest” (Quantitative Equity and Solutions Team) unit has developed a proprietary stock selection model to forecast returns.
Instead of using smart or exotic beta, the team use well-established and verified data sets to analyse equity markets. They have created a tool that predicts the alpha component of a stock. Using machine learning to understand specific return drivers allows the team to create an optimal portfolio, Pictet say.
“The amount of financial data is expanding rapidly, thanks to machine learning and AI it is possible to add alpha with a profound impact,” says David Wright, head of quant.
“Our proprietary stock selection model has already been deployed as a sleeve of Pictet AM’s Multi Asset Global Opportunities fund since July 2023 – as well as its multi-strategy hedge fund, ‘Alphanatics’, and its Total Return fund, Diversified Alpha, since January 2024 – and the strategy returns have been impressive, particularly given the volatile market environment.”
Stéphane Daul, senior investment manager, adds: “We believe existing quant factor investments offered by the broader industry can have limitations, particularly when changes to the economic regime occur.
“However, our privately-owned status and long-term approach to investing have allowed us to diligently build, train and test machine learning models, using a range of data including fundamentals, analyst sentiment, prices and market activity, that confidently deliver better outcomes for investors.”
Pictet TR – Quest AI is offered as a daily-dealing UCITS strategy registered for sale in Austria, Belgium, Denmark, Fin- land, France, Germany, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Singapore, Sweden, Switzerland and the UK.
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