News Digest:

BNP Paribas Global Markets has taken a groundbreaking approach to thematic investing, merging artificial intelligence (AI) with long-term lifestyle trends like healthy living and new energy. Through its Theam Quant activity, the bank has launched two AI-driven funds via its Asset Management branch, transforming institutional strategies into accessible investment opportunities.

According to Roberto Bartolomei, Head of Alternative and Quantitative Investment Solutions Fund Sales, this strategy expands market reach by leveraging AI for stock selection while maintaining human oversight. Machine learning identifies companies aligning with key themes, analyzing factors such as technology investments and financial viability.

This AI-driven selection process has produced surprising outcomes. In 2023, the model flagged Ford for the New Energy fund due to its aggressive EV expansion plans. However, as Ford shifted its focus to hybrids in 2024, both AI and analyst assessments led to the stock’s removal. Unlike many thematic funds that concentrate on obvious players, Theam’s strategy enforces strict diversification, capping single-stock exposure at 3% while maintaining sectoral and geographical balance.

The approach is already delivering results. The Healthy Living fund has outperformed the MSCI World Health Care Index by 3%, while the New Energy Opportunities Fund has beaten the iShares Clean Energy Fund by over 20%. Encouraged by these outcomes, BNP Paribas plans to expand its AI-powered thematic investment range.

End Notes

Source: https://www.hedgeweek.com/these-new-ai-powered-funds-are-turning-lifestyle-shifts-into-alpha-heres-how/