Marketing communication. For Investment Professionals only

M&G (Lux) Global Maxima Fund

Artificial intelligence applied to investments
Gautam Samarth, Fund Manager

Fund philosophy

  • Global universe A global equity fund seeking to outperform the global equities market over any five-year period.
  • Artificial intelligence The fund applies developments in artificial intelligence, data science and computer process to provide stockpicking recommendations.
  • Human oversight All stock recommendations are sense checked by the fund management team prior to inclusion to avoid problems with blindly following a black box such as the impact of data errors, idiosyncratic events, corporate actions etc.
  • Diversified portfolio The final portfolio holds around 100 stocks from anywhere in the world, including emerging markets, diversified by industry and country to ensure that, while stockpicking drives outperformance, no single stock, sector or country have an outsized impact on the portfolio.

Applying artificial intelligence to stock picking

The Maxima strategy uses a number of machine-learning algorithms to pick stocks. They work by taking a large amount of historical data on the universe of global company shares, and combining that with the knowledge of how each stock performed. Having been trained, the algorithms are given live data. They analyse this to rank each of the stocks that we might invest in, according to their likelihood of outperforming in the future. From this a portfolio of highest-scoring stocks is constructed subject to industry and country limits that ensure portfolio diversification is maintained.

P/E = price-earnings ratio; P/B: price-to-book ratio; DCF = discounted cashflow. These are all types of valuation methods.

Alpha score = Indicates how much a stock outperforms the market average.

Source: M&G.

Reasons to invest

  • A differentiated approach to stock selection Artificial intelligence (AI) can be trained to identify patterns in financial data that predict future outperformance, across a wider investment universe, that are potentially too nascent, opaque or complicated for humans to initially pick up on.
  • Man and Machine While the fund uses sophisticated mathematical techniques, the underlying principles of the process are intuitive to traditional stockpicking and subject to continuous oversight from the fund managers
  • Continuous improvement Ongoing R&D ensures that the new concepts in the growing field of AI are researched and tested for their efficacy in improving the stock selection model.

Fund Facts

31 July 2022 US$92.54 million
Fund launch date 11 December 2019
Benchmark* MSCI ACWI Net Return Index

Source of fund facts: M&G, as at 31.07.22.

*The benchmark is a comparator against which the Fund’s performance can be measured. It is a net return index which includes dividends after the deduction of withholding taxes. The index has been chosen as the Fund’s benchmark as it best reflects the scope of the Fund’s investment policy. The benchmark is used solely to measure the Fund’s performance and does not constrain the Fund’s portfolio construction. The Fund is actively managed. The investment manager has complete freedom in choosing which investments to buy, hold and sell in the fund. The Fund’s holdings may deviate significantly from the benchmark’s constituents.

This is a marketing communication. Please refer to the prospectus and to the KIID before making any final investment decision.

The value and income from the fund’s assets will go down as well as up. This will cause the value of your investment to fall as well as rise. There is no guarantee that the fund will achieve its objective and you may get back less than you originally invested.

The fund can be exposed to different currencies. Movements in currency exchange rates may adversely affect the value of your investment.

Investing in emerging markets involves a greater risk of loss due to greater political, tax, economic, foreign exchange, liquidity and regulatory risks, among other factors. There may be difficulties in buying, selling, safekeeping or valuing investments in such countries.

The fund may invest in China A shares. Investments in assets from China are subject to changeable political, regulatory and economic conditions, which may cause difficulties when selling or collecting income from these investments. In addition, such investment is made via the Stock Connect system, which may be more susceptible to clearing, settlement and counterparty risk. These factors could cause the fund to incur a loss.

Further details of the risks that apply to the fund can be found in the fund's Key Investor Information Document and Prospectus.

Investing in this fund means acquiring units or shares in a fund, and not in a given underlying asset such as a building or shares of a company, as these are only the underlying assets owned by the fund.

For Professional Investors only. Not for onward distribution. No other persons should rely on any information contained within.

This financial promotion is issued by M&G Investments (Hong Kong) Limited. Office: Unit 1002, LHT Tower, 31 Queen’s Road Central, Hong Kong. The contents of this document have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the offer of any funds mentioned in it. If you are in any doubt about any of the contents of this document, you should obtain independent professional advice. Shares, units or other interests in the funds mentioned in this document may only be offered or sold in Hong Kong to persons who are “professional investors” as defined in the Securities and Futures Ordinance (“Ordinance”) and any rules made under the Ordinance – or in circumstances which are permitted under the Companies (Winding Up and Miscellaneous Provisions) Ordinance. In addition, distribution of this document in Hong Kong is restricted. It may not be issued or possessed for the purposes of issue, whether in Hong Kong or elsewhere, and shares, units or other interests in the funds mentioned may not be disposed of to any person unless such person is a “professional investor” as defined in the Ordinance and any rules made under the Ordinance or as otherwise may be permitted under Hong Kong law.