Pictet AM launches the first long/short UCITS fund that uses AI for stock selection
7 APR, 2025
Pictet AM has announced the launch of Pictet Total Return - Quest AI, a global equity long/short strategy, market neutral, that uses cutting-edge artificial intelligence (AI) for stock selection, with the aim of offering pure alpha (excess return relative to risk) to investors. Domiciled in Luxembourg under UCITS regulations, with daily valuation and liquidity, it is registered in Spain and can be transferred without fiscal toll.
This is the first UCITS long/short that fully utilizes AI for stock selection, an innovative approach in the alternative funds market. The new strategy offers absolute return and diversification, without correlation with the global equity market, conventional "long-only" equity portfolios and most other alternative investments.
Stéphane Daul, Reda Jürg Messikh and Thibault Jaisson are co-managers of the new fund, from the Quest team of quantitative equity strategies of Pictet AM, made up of 22 professionals, who provide support in research, technology, implementation and customer relations.
The Quest team has developed its own AI-based model for stock selection. Instead of "smart" or exotic betas, it uses known and proven data sets to analyze equity markets, through a transparent tool, capable of predicting, with a high degree of accuracy, the idiosyncratic component of each value, achieving an optimized portfolio. Its machine learning model captures relationships between data over a broad historical horizon, with rigorous back-testing.
The volume of financial data is expanding at a great speed. Currently, thanks to machine learning and AI, it is possible to generate alpha, with deep impact. Our proprietary stock selection model has already been supporting the Pictet AM Multi Asset Global Opportunities fund since July 2023, the 'Alphanatics' multi-strategy hedge fund and the Diversified Alpha total return fund since January 2024, with especially impressive returns given the volatility that has characterized the market.
David Wright, director of Quantitative Investments at Pictet AM
We believe that the quantitative factor investments that the sector generally offers have limitations, especially when there are changes in the economic regime. However, Pictet's private nature and its long-term investment approach has allowed our team to dedicate the necessary time to build, train, and meticulously test machine learning models from a large arsenal of data, among others, fundamentals, analyst sentiment, prices and market activity, in order to generate better results with a high degree of confidence for investors.
Stéphane Daul, co-manager of Pictet Total Return - Quest AI, lead manager in the Quest team at Pictet AM
