Geneva-based Pictet Asset Management has launched its first European range of AI-enhanced equity index active ETFs. The new suite includes:
- PQWD – Pictet AI Enhanced World Equity UCITS ETF
- PQWX – Pictet AI Enhanced World ex US Equity UCITS ETF
- PQUS – Pictet AI Enhanced US Equity UCITS ETF
- PQEU – Pictet AI Enhance d European Equity UCITS ETF
The enhanced equity index strategies are designed to outperform their benchmark indices by around 1% a year, net of fees, while tracking the index closely, with a targeted tracking error of up to 2% and a beta of 1.0 (meaning returns are designed to move broadly in line with the market).
The process is overseen by Pictet’s team of quantitative experts, who developed the model, ensure quarterly training cycles, and monitor the portfolio. The result is a factor neutral strategy independent of market and economic cycles.
David Wright, Head of Quantitative Investments at Pictet Asset Management, said: “Investors often believe improving returns means seeking new or exotic sources of outperformance. In reality, it’s often about navigating the same investment universe and data more intelligently.
“This is where AI excels – it can spot complex patterns that humans cannot see. Our new AI Enhanced Equity Index Active ETFs provide core building blocks for our clients. They seek to deliver that extra return above the benchmark at a low cost without substantially increasing risk.”
Each ETF aims to outperform passive strategies without materially increasing risk and at minimal extra cost. This makes them well suited as core portfolio holdings for investors seeking low-risk, lower-cost, compounding outperformance.
The AI model offers a different source of outperformance (alpha) from traditional factor-based enhanced-index approaches. Some Pictet Asset Management clients are already using it to offset the costs of their passive holdings; for example, moving 20% of a passive allocation into an enhanced-index strategy can bring the cost of the index portion of a portfolio close to zero.
The new ETFs are listed on XETRA (DE) and Euronext (ITA) with additional listings on LSE (UK) & SIX (CH) exchanges to follow.
