AXA Investment Managers Rosenberg Equities has announced the implementation of advanced modelling techniques using neural networks into their investment approach.
The model has been included into the sustainable equity strategy of the firm, part of the Advanced Factors range.
It aims to improve the strategy’s ability to identify stocks that are at risk of extreme price events, mitigating tail risks, and seeking to improve risk/return outcomes for clients.
Big data is another theme Rosenberg Equities considers. It looks at unstructured data that would complement traditional financial data to provide deeper insights into company fundamentals and sentiment.
For instance, the firm is developing a ‘natural language processing’ model to analyse company filings and other text sources aiming at creating new insights into the investor sentiment associated with a company.
Gideon Smith, Europe CIO of AXA IM Rosenberg Equities, commented: “This is the first step in us using neural network techniques and advanced artificial intelligence in client portfolios, but is a natural progression of the advanced quantitative techniques we’ve adopted over the last thirty years. We believe this is a considered step and consistent with our investment approach of modelling and managing investment risk for clients. It’s an area where we have a wealth of knowledge and expertise and we are excited to leverage these techniques with the aim of improving client results in all areas of the investment process.”
Heidi Ridley, CEO of AXA IM Rosenberg Equities, added: “Both of these developments are a great example of how we can use artificial intelligence and unstructured data to complement our existing modelling techniques, supporting our belief that innovative use of data and technology leads to better insights and ultimately better outcomes for our clients.”
AXA IM had €735bn in AuM as of end of June 2017.