The note is linked to the AI Powered US Equity Index 5 (AiPEX5), which through the application of AI and tapping big data aims to help investors capture growth opportunities in varied market conditions.
“In an increasingly complex investment landscape where each data point could represent a potential market trend, the ability to process real-time big data has become a differentiator at times of market volatility,” said Justin Chan, head of Greater China, global markets, Asia-Pacific, HSBC.
The AiPEX family of indices, which AiPEX5 is a part of, was developed by HSBC and EquBot featuring IBM Watson. The AiPEX indices are the first and only rules-based equity strategies that use IBM Watson to analyse millions of data points and turn them into investment insights, according to HSBC.
AiPEX5 objectively evaluates each of the 1,000 largest US publicly traded companies and selects those whose stock prices are poised for growth. It operates by learning from publicly available and continuously generated data points, such as a company announcement, a tweet, a satellite image of a shop parking lot, or the tone of language a CEO uses during an earnings presentation.
The index simulates a team of thousands of analysts and traders to analyse millions of information pieces and identify potential investment opportunities.
Under its daily volatility control mechanism, the AiPEX5 can reduce the risk exposure for investors. AiPEX5 targets a 5% daily volatility by assigning portfolio weights to selected equities, with the largest weights going to the equities with the highest combined scores and vice versa, according to HSBC
The structured product will be available to HSBC Jade customers — those with HK$7.8m ($1m) deposited with the bank — and with professional investor status, according to statement by the bank.
“Stock markets are hard to predict, but technology is creating new approaches to investing, using AI and the power of big data to deliver risk-adjusted returns is an example,” said Sami Abouzahr, head of customer wealth, wealth and personal banking, Hong Kong, HSBC
Products linked to the AiPEX family indices have also been launched by HSBC in other markets of Asia Pacific.
