HSBC has launched the artificial intelligence-powered US Equity Index (AiPEX) family, developed by EquBot and and IBM Watson to turn big data into investment insight.

The indexes use AI to ingest and learn from the vast amounts of publicly available and continuously generated data points. Data points could include a company announcement, a tweet, a satellite image of a store parking lot, or even the tone of language a chief executive uses during an earnings presentation.

Applying what has been learned through this data and the AI algorithm, AiPEX uses a rules-based process to objectively evaluate each of the 1,000 largest US publicly traded companies and selects those whose stock prices are poised for growth.

AiPEX rebalances its portfolio monthly, and to manage short-term volatility, reallocates among chosen equity and cash on a daily basis. It selects companies with stock prices that may be poised for growth according to an objective selection process that is similar to a fundamental equity research approach, only thousands of times faster and broader in scope.

“In today’s markets, investors need strategies that can keep up with the growing amount of data being generated each day,” said Dave Odenath, head of quantitative investment solutions for the Americas at HSBC Global Banking and Markets. “AiPEX with Watson simulates a team of thousands of analysts and traders working around the clock to learn from millions of pieces of information and identify potential investment opportunities.”

HSBC is the exclusive licensor of AiPEX, and is offering a variety of investment solutions based on the indices to its clients globally. Athene USA, a provider of retirement savings products, also now offers AiPEX in its suite of fixed indexed annuities.

“The AiPEX index is the first of its kind to bring artificial intelligence technology to crediting strategies within fixed indexed annuities, offering 100 per cent equity exposure,” said Grant Kvalheim, president of Athene USA. “By partnering with HSBC to bring this groundbreaking index to our product platform, Athene builds on its reputation as a leading provider of unique, value-driven retirement solutions for the retail market.”

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