HSBC Singapore has launched the AI Powered US Equity 5 Index (AiPEX5) and the Bank’s first Index Linked Structured Note to utilise artificial intelligence (AI) as a method for equity investing. AiPEX5 turns Big Data into investment insight by using AI to evaluate stocks with the aim of generating positive long-term returns to build wealth for investors.
Launched in July 2020, the USD-denominated AiPEX5 Index Linked Structured Note was offered to Singapore accredited investors within HSBC’s retail banking business, and is a further step in the Bank’s strategy to develop market-leading, innovative solutions to cement its wealth proposition in the region. The offer has since been concluded.
AiPEX5 is part of the family of indices that derive investment insight from AI and Big Data1, the first and only rules-based equity strategies to use IBM Watson to turn data into investment insight.
AiPEX5 operates by ingesting and learning from publicly available and continuously generated data points, examples of which include a company announcement, a tweet, a satellite image of a shop parking lot, or even the tone of language a CEO uses during an earnings presentation.
Applying what has been learned through Big Data and AI, AiPEX5 uses a rules-based process to objectively evaluate each of the 1,000 largest U.S. publicly traded companies2 and selects those whose stock prices are poised for growth. AiPEX5 rebalances its portfolio monthly, and to manage short-term volatility, AiPEX5 reallocates among chosen equity and cash on a daily basis. AiPEX5 selects companies with stock prices that may be poised for growth according to an objective selection process that is similar to a fundamental equity research approach, only thousands of times faster and broader in scope.
Gavin Powell, Head of Global Markets and Securities Service, HSBC Singapore: “Investors need strategies that act in real-time to process the vast quantities of Big Data across the world; each new piece of data represents a potential insight, which could lead to better investment outcomes.”
“AiPEX5 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. The result is that we can offer clients solutions that not only keep up, but thrive in an increasingly complex world of data.”
HSBC is the exclusive licensor of AiPEX5 and is offering a variety of investment solutions based on the indices to its clients globally.
The roll out of AiPEX5 marks a further step in HSBC’s strategy to strengthen its position as a leading global wealth manager.
Ian Yim, Head of Wealth and International, HSBC Bank (Singapore) shared: “In order for us to compete effectively in the high net worth space, we need to offer innovative investment products that respond efficiently to market volatilities and global uncertainties. Customers who have invested into the AiPEX5 Index Linked Notes like that it adopts a completely rules-based equity strategy, which eliminates human-biasness and is able to react to market conditions effectively.”
To better facilitate virtual investing, especially in response to the Circuit Breaker period, HSBC has doubled the spend and roll out of digital solutions for its retail banking business in Singapore over the past two years. These include:
Earlier this year, HSBC announced the launch of a new global business, Wealth and Personal Banking, combining Retail Banking and Wealth Management and Global Private Banking, to become one of the world’s largest global wealth managers with USD1.4 trillion in assets, with nearly half of the assets from Asia3.
HSBC Wealth and Personal Banking covers the entire spectrum of private wealth, from retail clients to ultra-high net worth (UHNW) individuals. Across Asia, where wealth pools are growing faster than in any other region, HSBC’s wealth revenues grew 12% in 2019 (year on year) to USD5.7 billion. HSBC will continue to invest in its wealth management business globally, with a particular focus on Asia, including Hong Kong and mainland China (especially the Greater Bay Area) as well as Southeast Asia, some of the world’s fastest growing economies. Singapore is central to HSBC’s Asia Wealth ambitions.
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Note to editors:
About AI Powered US Equity 5 Index (“AIPEX5”)
Additional information is available at http://aipex5.gbm.hsbc.com.
EquBot offers compelling global financial technology solutions powered by artificial intelligence (AI) and machine learning (ML). The EquBot investment technology platform works around the clock to process market big data and unstructured electronic signals to formulate innovative and actionable investment insights. The use of multiple instances of AI at the core of EquBot's proprietary algorithms position the firm as an industry leader in data consumption while simultaneously growing its global knowledge and investment value base. EquBot’s unique technology structure allows for efficient construction of custom investment solutions. EquBot seeks to use its investment technology platform to take leadership in bringing affordable AI investment products to market for investors of all backgrounds. EquBot is a participant in the “With Watson” program and a graduate of the IBM Global Entrepreneur Program. EquBot is headquartered in San Francisco. Additional information is available at www.equbot.com.
About IBM Watson
For more information about IBM Watson, please visit www.ibm.com/watson
About The Hongkong and Shanghai Banking Corporation Limited
The Hongkong and Shanghai Banking Corporation Limited is the founding member of the HSBC Group. HSBC serves customers worldwide from offices in 64 countries and territories in its geographical regions: Europe, Asia, North America, Latin America, and Middle East and North Africa. With assets of US$2,923bn at 30 June 2020, HSBC is one of the world’s largest banking and financial services organisations.
About HSBC Singapore
HSBC Group’s history in Singapore dates back to 1877 when its founding member, The Hongkong and Shanghai Banking Corporation Limited, opened its first branch on the island. A qualifying full bank, HSBC in Singapore offers a comprehensive range of banking and financial services including retail banking and wealth management; commercial, investment and private banking; insurance; forfaiting and trustee services; securities and capital markets services. One of the earliest banks to establish in Singapore, HSBC today is a prominent player in Singapore's financial services sector serving the banking needs of multi-national corporations, home-grown businesses, private banking clients, institutional and retail customers. In May 2016, HSBC locally incorporated its retail banking and wealth management business in Singapore and established, HSBC Bank (Singapore) Limited. HSBC Singapore has a retail network of 13 branches (comprising 10 dedicated HSBC Premier Centres, 2 HSBC Jade Centres and a Premier International Centre) and many locations across the island providing self-service terminals.
1 AiPEX5 was developed by EquBot, a San Francisco based Asset Manager, and leverages the AI capabilities of IBM Watson ™: see notes to Editors.
2 From Solactive US Large Cap and mid Cap Index (Russell 1000 equivalent)
3 HSBC Press Release: HSBC creates wealth powerhouse to tap Asia opportunity