Kenanga Investors Berhad launched its first fund dedicated for artificial intelligence (AI), known as Kenanga Global Multi Asset Fund. It aims to deliver absolute returns in any market condition by diversifying into global index futures with a long-short strategy.
According to Ismitz Matthew De Alwis, Executive Director and CEO of Kenanga Investors, this fund is the first-of-its-kind in Malaysia, leveraging the breakthroughs in AI to identify profit opportunities from short-term predictive relationships in pricing and volume data. It then constructs portfolios with a focus on capital preservation based on forecasts of instruments’ movements.
The fund feeds into the TCM Global Index Fund (Cayman) Ltd (Target Fund), which is managed by Taaffeite Capital Management, LLC. The Target Fund is an absolute return fund measured against a benchmark of 15% per annum over 2-3 years which profits from the daily movement of global equity and fixed income indices.
The underlying assets are a long/short basket of 25 liquid global indices rebalanced once a day based on probabilistic forecasts of how indices will move over the next 24 hours.
“Investments may appreciate or decline with a much greater velocity due to various sentiments. However, in an AI model, these sentiments are put aside and investment decisions are based solely on its unique algorithm, which spots opportunities in these asset mispricing. The AI system learns and improves over time to achieve investors’ objectives,” he said.