HSBC launches AI Powered Multi Asset Index (AIMAX) with EquBot

Rick Steves

The launch of AIMAX follows HSBC’s launch of AiPEX, an AI-powered stock index family using IBM WatsonTM, which has gone live on August 9, 2019, and has outperformed the S&P 500 Total Return Index by 4.79 percentage points.

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HSBC has launched a rules-based multi-asset investment strategy to use artificial intelligence (AI) as a method for constructing a diversified growth portfolio.

The AI Powered Multi Asset Index (AiMAX) family was developed in collaboration with EquBot, which was developed an AI-based ETF in the past and utilizes IBM Watson Discovery to retrieve and analyze millions of data points, from both traditional sources such as financial statements and non-traditional sources such as social media posts.

By building intuition and experience from historical information, continuously updated, AiMAX constructs a diversified portfolio of assets whose prices are poised for growth.

The multi asset index invests across 15 asset classes, spanning five investable asset types (Developed Equities, Developed Bonds, Emerging Markets, Real Assets, and Inflation Assets) and a cash index.

David Odenath, Head of Quantitative Investment Solutions, Americas at HSBC Global Banking and Markets, said: “This is a new approach to multi-asset investing that combines cutting edge AI techniques and a time-tested diversification strategy to balance risk and returns. By using AI and big data to improve the accuracy of our capital markets assumptions, we are able to deliver a next generation asset allocation strategy to our clients.”

According to the firm, as of February 26, 2021, AiMAX would have performed above the S&P 500 Price Return Index with significantly less volatility and more diversification during the prior fifteen years.

Grant Kvalheim, CEO and President of Athene USA, commented: “As we help individuals fund their retirement needs, it’s crucial that we create solutions that help them meet their future financial goals. HSBC has been a great partner in developing customized equity indexes for our annuities, which Athene clients can rely on to provide retirement solutions that are an important part of a total financial plan.”

The launch of AIMAX follows HSBC’s launch of AiPEX, an AI-powered stock index family using IBM WatsonTM, which has gone live on August 9, 2019, and has outperformed the S&P 500 Total Return Index by 4.79 percentage points.

As the exclusive licensor of AiMAX and AiPEX, HSBC offers a variety of investment solutions based on the indices to its clients globally.

HSBC Securities (USA) Inc has recently settled with Cboe BZX Exchange, Inc for having entered erroneous orders on BZX on March 9, 2018.

The bank agreed to pay $9,000 for having executed an order to buy 37,000 shares of an equity security on behalf of a foreign affiliate bank. It was a Market on Close (MOC) order and should have been executed after the close of trading.

HSBC used an automated MOC “hotkey” function in the firm’s order entry system and, due to faulty hotkey programming, the order was entered as a regular market order.

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