SCBAM launches AI fund
SCB Asset Management (SCBAM) has introduced an equity investment fund that uses artificial intelligence (AI) to conduct thorough analysis and select stocks with favourable investment criteria.
The SCB Machine Learning Thai Equity Fund (SCBMLT) is forecast to generate an annual return on investment of about 5%, said SCBAM president Smith Banomyong.
Mr Smith said the AI tool will select stocks in the SET100 that meet selected investment criteria such as growth momentum, quality, sentiment, valuation and risk.
The tool will display the most interesting stocks worthy of investment, he said.
According to Mr Smith, AI outperforms humans in assessing information because humans take longer and are more error-prone.
Fund managers will have the ultimate authority on stock selection and deciding when to buy or sell certain stocks in the fund’s portfolio. This should prevent irregularities in trade orders from AI recommending only overweight stocks or stocks clustered in a specific sector.
Based on backtesting, SCBMLT generated an annual return over a two-year period of 5%, beating the SET index, Mr Smith said.
The final process on trade orders is made by a fund manager. The target is to beat the return of the SET index.
The fund’s registered investment size is about 3 billion baht.
Meanwhile, SCBAM has a positive outlook on Thai stocks, citing the government’s economic stimulus measures that are expected to support private consumption and boost exports, tourism and private investment.
Risks include the US Federal Reserve’s imminent plan to reduce its balance, which in turn will affect global financial liquidity, while volatile oil prices and foreign exchange remain as factors that could influence investor sentiment.
Separately, the Securities and Exchange Commission (SEC) yesterday warned investors to be cautious with securities investment after news reports of 30 people being persuaded to invest in bonds and equities with a guaranteed high return in the short run. The lowest investment amount was 10,000 baht.
Investors have already filed complaints with the police over a loss on investment of 11 million baht, according to the SEC.
The market regulator warned that investors should not invest in firms that are not authorised by the SEC to offer securities investment products. Investors should avoid enticements advertised on social media, the SEC said.