San­lam fund first in the world to be man­aged en­tirely by AI, ma­chine learn­ing

Weekend Argus (Saturday Edition) - - FRONT PAGE - SIZWE DLAMINI

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).

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