AXA IM's Rosenberg Unit To Integrate AI Into Investment Process

Oct 16 2017 | 8:48pm ET

The Rosenberg equities division of AXA Investment Managers has embarked on integrating artificial intelligence and big data techniques such as neural networks into its investment approach.

The unit, which serves as AXA IM’s quantitative investment team, has been at the forefront of quantitative investing and has developed significant experience leveraging machine learning, the company said in a statement. 

The first step in the new integration will be the inclusion of a neural network model in the company’s Sustainable Equity strategy, part of AXA IM’s Advanced Factors range. The new model aims to improve the strategy’s ability to identify stocks that are at risk of extreme price events, mitigating tail risks, and seeking to improve risk/return outcomes for clients, the statement said. 

In June, the Rosenberg Equities promoted Kathryn McDonald, previously the company’s director of investment strategy, to the position of head of sustainable investing.

In addition, Rosenberg Equities is looking at new ‘unstructured’ data sets that can complement the traditional financial data investors have historically focused on to provide deeper insights into company fundamentals and sentiment. For example, the team is developing a ‘natural language processing’ model to analyze company filings and other text sources to glean new insights into the investor sentiment associated with a company.

“This is the first step in us using neural network techniques and advanced artificial intelligence in client portfolios, but is a natural progression of the advanced quantitative techniques we’ve adopted over the last thirty years,” said Gideon Smith, Europe CIO of AXA IM Rosenberg Equities, in the statement. “We believe this is a considered step and consistent with our investment approach of modeling and managing investment risk for clients.”

Paris-based AXA IM managed more than €735 billion as of June 2017 from 21 offices in over 60 countries. The company’s Rosenberg equities unit has approximately $20 billion in AUM deployed across primarily systematic equity strategies. AXA IM is part of the AXA Group, one of the largest financial services businesses in the world.

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