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Nomura sees ‘significant’ returns improvement by using AI for portfolio construction


Nomura Asset Management Co Ltd is seeing a ‘significant’ returns improvement with Artificial Intelligence (AI) for its portfolio construction.

Commenting on its AI fund strategy launched on Feb 2, 2018, Nomura Asset Management Malaysia (NAMM) managing director and country head Nor Rejna Abdul Rahim  said: “I think we’re quite happy that it (fund) outperformed Japan’s Topix — the benchmark, despite February being a very tough month. However, it’s pretty premature for us to talk about performance.”

Also, Nomura will be launching its global version of the AI fund strategy this coming June.

Speaking to reporters at the NAMM 2018 Breakfast Conference, Rejna said AI enables portfolio managers to maneuver within the markets a lot better, as humans are very emotion-driven.

Nomura Asset Management Senior Investment Officer Tsuyoshi Ogawa noted AI enhances the decision-making process for portfolio construction, as humans can only remember short term, but AI, on the other hand, coan extract information of 80 years, which Nomura has collected over the years.

“We see very positive developments and we think that in terms of sophistication and complication, the modelling will improve a lot more. So, a lot of the unstructured data that you see right now, will in fact be part of the investment management’s processes, because before, we’ve always been concentrating on just the company’s financials,” Rejna said.

Ogawa explained that AI takes a very ‘holistic perspective’ as it will take into account, the company’s financials, employee sentiment, as well as market perception. “It’s a very 360 degree type of information that we’re looking at, rather than purely on the numbers,” Rejna added.

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