HSBC launches AI-based index

Financial giant HSBC is launching a family of U.S. equity indexes that utilize artificial intelligence (AI) to dictate stock selection.

The company says that it has licensed the AI Powered US Equity Index (AiPEX) family, developed by San Francisco-based asset manager EquBot Inc. to generate investment insights from “big data.”

“Data points could include a company announcement, a tweet, a satellite image of a store parking lot, or even the tone of language a CEO uses during an earnings presentation,” HSBC stated in a release.

The index uses this data to evaluate the 1,000 largest U.S. publicly traded companies, and aims to pick stocks whose prices are poised for growth according to the AI.

The index portfolio, which includes about 250 stocks, is rebalanced monthly.

“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,” said Dave Odenath, head of quantitative investment solutions, Americas, at HSBC Global Banking and Markets.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.