In a world first, Sanlam Global Investment Solutions (SGIS) has taken the leap into fully utilising artificial intelligence (AI) and machine learning, and this week announced that its Sanlam Managed Risk UCITS Fund will now be completely managed by these technologies.
SGIS chief executive Cobus Kruger says the purpose of AI is to help people to process and interpret vast amounts of data more efficiently. “Machine learning autonomously learns and adapts to new data without being pre-programmed and at speeds that are far beyond human capacity. These two factors should provide good value and help to deliver better, more consistent outcomes,” Kruger says.
AI and machine learning can be used in investment management broadly in two ways:
• The enhancement of a manager’s investment process, by producing more timely asset allocation and stock allocation buy-sell signals on a portfolio of instruments chosen directly by the investment manager, or the way in which the Sanlam Managed Risk Fund is using AI and machine learning; and
• The total automation of the investment process, meaning AI selects the optimal portfolio allocation based on a pre-defined investment strategy with objectives, constraints and investable instruments.
Gideon Nell, the head of global distribution at SGIS, says: “We have been on a quest to supply investors with a truly differentiated investment solution designed to eliminate human emotions, actively adapt to changing markets and help to materially improve the consistency of achieving investment goals with significantly reduced downside risk. We believe the AI capability ticks all these boxes and, in the form of the Sanlam Managed Risk UCITS Fund, provides a transparent, easily accessible vehicle.”
The Sanlam Managed Risk UCITS Fund is an offshore fund denominated in United States dollars and domiciled in Ireland. Subject to European Union regulation, it is similar to a South African multi-asset flexible fund. The fund regularly holds more than 80% of its portfolio in equities, and it does not hold any bonds. The fund’s top holdings in May (prior to the AI switchover) were: Apple, Microsoft, Amazon, Facebook and Alphabet (Google).