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Aberdeen Standard Investments Launches Global Equity AI Fund

21 Aug 2018

Aberdeen Standard Investments has launched a new fund that utilises machine learning to identify sources of potential returns.

The Aberdeen Global (AG) Artificial Intelligence Global Equity SICAV, launched in Luxembourg, is the product of a collaboration between Aberdeen Standard Investments’ Quantitative Investment Strategies (QIS) team and Mitsubishi UFJ Trust Investment Technology Institute (MTEC)/Mitsubishi UFJ Trust and Banking Corporation (the Trust Bank) in Tokyo, Japan – a centre of excellence in robotics, artificial intelligence and financial technology.

The Fund embeds machine learning techniques within the investment process and will use a variety of quantitative techniques to time its investments. These investments will be based on ‘factor premia’ - those sources of risk such as value, quality, momentum, small size and low volatility that can provide investors with persistent risk-adjusted excess returns.

Martin Gilbert, Co-CEO at Standard Life Aberdeen, comments:
“For active investment management firms, the ability to use machines to read and understand vast amounts of data in order to forecast market moves more accurately has spawned innovation and a resurgence in active quantitative investment approaches. To benefit from this AI-driven innovation, and to complement our highly successful active fundamental strategies, we are proud to have collaborated with the MTEC – Japan’s leading and most prestigious financial technology think-tank – and the Trust Bank to develop this active quant Fund.

Junichi Narikawa, President of Mitsubishi UFJ Trust Investment Technology Institute (MTEC), added:
“This is the first time in MTEC’s 30-year history where we have collaborated with an entity in Europe and are pleased to work with a world-class investment firm of the calibre of Aberdeen Standard Investments. We have worked with their Quantitative Investment Strategies team in London and Edinburgh over a two-year period, and developed a number of innovative AI-models to identify and capitalise upon patterns in global equity markets in order to dynamically time factor premia to generate alpha.”

David Wickham, Global Head of Quantitative Solutions at Aberdeen Standard Investments, comments:
“Recent innovations in AI, combined with rapid advances in computational power, have enabled us to harness machine learning techniques to dynamically time factor premia. This is an innovative AI-powered approach to factor timing, that enables us to systematically determine the weightings to each factor within the new global equity Fund and also allows us to time the relevant individual metrics used within those factors. We can now bias our portfolio towards the factors best suited to today’s market environment and continue to evolve the factor exposures as the market changes through time.

“This new technique builds upon our existing diversified multifactor investing strategies – namely SMARTER Beta1 and BETTER Beta2 that we have successfully employed for over a decade. We believe this is a unique approach within the mainstream investment community. At present, most AI products are either thematically focused, investing in well-known and relatively expensive AI-related companies – or ‘big data’ focused where investment managers attempt to extract alpha from unstructured data sources using machine learning techniques. We’ve created an elegant approach with great return potential by embedding machine learning within the investment process to enhance factor timing.”

This new capability is an extension of the firm’s existing factor investing strategies, amounting to USD 49* billion in assets, including the recently launched proprietary SMARTER Beta multifactor equity indices and funds and the BETTER Beta range of enhanced indexation funds. Each of these strategies embed an ‘ESG Inside’ methodology to exclude those companies engaged in producing controversial weapons and, where applicable, companies that are deemed to be experiencing severe ESG controversies as rated by its ESG data partner Sustainalytics.

-Ends-

Media enquiries:
Rosalind Gould
+44 (0)131 245 3982
rosalind.gould@aberdeenstandard.com

Notes to Editors

  • Aberdeen Standard Investments is the manufacturer and distributor of the AG Artificial Intelligence Global Equity Fund and owns all associated intellectual property rights.
  • The Fund has initially been registered for sale in Luxembourg, Switzerland and the United Kingdom.
  • The AG Artificial Intelligence Global Equity Fund’s Asset Management Charge (AMC) amounts to 0.50% per annum for institutional investors and 1.00% per annum for retail investors. Please refer to the latest prospectus for further details.
  • The QIS team is comprised of 31 investment professionals located across offices in Edinburgh, London and Shanghai and manages USD96 billion in assets (as at 30 June 2018). Formed in 2005, the QIS team manages a diverse range of systematic strategies across the risk-return spectrum including indexation, enhanced indexation (BETTER Beta), smart beta (SMARTER Beta), and active quant employing artificial intelligence (DISCOVER Alpha4). QIS maintains active collaborations with IHS Markit for SMARTER Beta; Mitsubishi UFJ Trust Investment Technology Institute (MTEC, a wholly-owned subsidiary of MUFG Trust Bank) for Artificial Intelligence; Sustainalytics for ESG data; and both Sustainalytics and the University of Oxford’s Smith School of Enterprise and the Environment (SSEE) for ESG Smart Beta research.
  • 1SMARTER Beta = Systematic, Multifactor, Active Measures, Resilient, Transparent, ESG Inside and RIPE Factors
  • 2BETTER Beta = Beta, Enhanced market cap, Tight tracking error, Transparent, ESG Inside and RIPE Factors

About Aberdeen Standard Investments

  • Aberdeen Standard Investments is a leading global asset manager dedicated to creating long-term value for our clients, and is a brand of the investment businesses of Aberdeen Asset Management and Standard Life Investments.
  • With over 1,000 investment professionals, we manage £557.1 billion, (USD 735.5bn)* of assets worldwide. We have clients in 80 countries supported by 50 relationship offices. This ensures we are close to our clients and the markets in which we invest.
  • We are high-conviction, long-term investors who believe teamwork and collaboration are the key to delivering repeatable, superior investment performance.
  • Standard Life Aberdeen plc is headquartered in Scotland. It has around 1.2 million shareholders and is listed on the London Stock Exchange. The Standard Life Aberdeen group was formed by the merger of Standard Life plc and Aberdeen Asset Management PLC on 14 August 2017.

You can access the Aberdeen Standard Investments media centre here: https://www.aberdeenstandard.com/news-and-media

*as of 30 June 2018

About MTEC
Mitsubishi UFJ Trust Investment Technology Institute (MTEC) is a research institute of MUFG that solves real-world challenges facing financial businesses by integrating mathematical and information sciences, provides financial solutions that are highly useful to businesses seeking to becoming leaders in the financial sector. MTEC was founded in 1988 as the first research institute for financial engineering in Japan.

For more information, visit http://www.mtec-institute.co.jp/en/

About Mitsubishi UFJ Trust and Banking Corp
Mitsubishi UFJ Trust and Banking (the Trust Bank) was established in 1927, and has been in business for approximately 100 years. The Trust Bank is a wholly owned subsidiary of MUFG and a core MUFG company. With total assets of 46.6 trillion yen as of March 31, 2018, it is one of Japan's largest trust banks. Besides operations in Japan, the Trust Bank serves customers to pursue its global business through a worldwide network of branches and subsidiaries in Asia, Europe and the United States. As Japan's major trust bank, the Trust Bank offers high-quality and comprehensive financial services for customers, which include various commercial banking services as well as asset management and administration, real estate, and stock transfer agency services.

For more information, visit https://www.tr.mufg.jp/english/

About MUFG
Mitsubishi UFJ Financial Group, Inc. (MUFG) is one of the world’s leading financial groups. Headquartered in Tokyo and with over 360 years of history, MUFG has a global network with over 1,800 locations in more than 50 countries. The Group has over 150,000 employees and offers services including commercial banking, trust banking, securities, credit cards, consumer finance, asset management, and leasing. The Group aims to “be the world’s most trusted financial group” through close collaboration among our operating companies and flexibly respond to all of the financial needs of our customers, serving society, and fostering shared and sustainable growth for a better world. MUFG’s shares trade on the Tokyo, Nagoya, and New York stock exchanges.

For more information, visit https://www.mufg.jp/english

About Sustainalytics
Sustainalytics is a leading ESG and corporate governance research, ratings and analytics firm supporting investors around the world with the development and implementation of responsible investment strategies. For 25 years, the firm has been at the forefront of developing high-quality, innovative solutions to meet the evolving needs of global investors. Today, Sustainalytics works with hundreds of the world’s leading asset managers and pension funds who incorporate ESG and corporate governance information and assessments into their investment processes. With 13 offices globally, Sustainalytics has more than 250 staff members, including over 170 research professionals with varied multidisciplinary expertise across more than 40 sectors. Through the IRRI Survey, investors selected Sustainalytics as the best independent responsible investment firm for here consecutive years, 2012 through 2014, and in 2015 and 2016. Sustainalytics was named among the top three firms for both ESG and corporate governance research. For more information, visit www.sustainalytics.com.


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Standard Life Investments companies:
Standard Life Investments Limited is registered in Scotland (SC123321) at 1 George Street, Edinburgh EH2 2LL. Standard Life Investments Limited is authorised and regulated in the UK by the Financial Conduct Authority.

Standard Life Investments companies:
Standard Life Investments Limited is registered in Scotland (SC123321) at 1 George Street, Edinburgh EH2 2LL. Standard Life Investments Limited is authorised and regulated in the UK by the Financial Conduct Authority.
Standard Life Investments Limited (ABN 36 142 665 227) is incorporated in Scotland (No. SC123321) and is exempt from the requirement to hold an Australian financial services licence under paragraph 911A(2)(l) of the Corporations Act 2001 (Cth) (the ‘Act’) in respect of the provision of financial services as defined in Schedule A of the relief instrument no.10/0264 dated 9 April 2010 issued to Standard Life Investments Limited by the Australian Securities and Investments Commission. These financial services are provided only to wholesale clients as defined in subsection 761G(7) of the Act. Standard Life Investments Limited is authorised and regulated in the United Kingdom by the Financial Conduct Authority under the laws of the United Kingdom, which differ from Australian laws.
Standard Life Investments Limited, a company registered in Ireland (904256) 90 St Stephen’s Green Dublin 2, is authorised and regulated in the UK by the Financial Conduct Authority.
Standard Life Investments (USA) Limited is registered as an Exempt Market Dealer with the Ontario Securities Commission and as an Investment Adviser with the US Securities and Exchange Commission. Standard Life Investments (Corporate Funds) Limited is registered as an Investment Adviser with the US Securities and Exchange Commission.

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