By NUR HAZIQAH A MALEK
Kenanga Investors Bhd has launched the first artificial intelligence (AI) feeder fund in Malaysia, called Kenanga Global Multi-Asset Fund, which aims to deliver absolute returns in any market condition.
The AI fund feeds into the target fund, TCM Global Index Fund (Cayman) Ltd, which is managed by the Taaffeite Capital Management LLC.
The target fund is an absolute return fund measured against the 15% benchmark per year over two to three years, which profits from the global equity and fixed-income indices daily movement.
The assets underlying the fund are a long or short basket of 25 liquid global indices that are rebalanced once per day based on movement forecasts, Kenanga noted in a release yesterday.
TCM Global registered a near 10% return this year and recorded a 23.2% return last year, ahead of the 12% return by the S&P 500 in 2016.
TCM Global has US$20.32 million (RM83 million) worth of assets under management currently and has a track record of four years.
The Cayman fund is not available for US investors.
The US-based Taaffeite was founded by Howard Siow and Dr Desmond Lun (picture) in 2013, and works to deliver scalable absolute returns that do not correspond with major asset classes and is consistent with market conditions.
To realise this, the firm built a machine-learning trading strategy through the fusion of AI and computational biology.
Kenanga Investors CEO and ED Ismitz Matthew De Alwis said the Kenanga Global Multi-Asset Fund aims to leverage on the AI breakthroughs to diversify into profit opportunities from predicted short-term relationships in volume and pricing data.
“The AI later constructs portfolios with a focus on capital preservation based on instruments’ movements forecast,” he noted in a press release yesterday.
He added that the fund provides investors with not only a wider asset class exposure, but is dynamically managed and has the flexibility to quickly adapt to movements in the market while managing downside risks.