Nomura Achieves Considerable Returns Improvement by Utilizing AI for Portfolio Construction

Nomura Achieves Considerable Returns Improvement by Utilizing AI for Portfolio Construction
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Nomura Asset Management Co Ltd. anticipates better returns by using artificial intelligence in its portfolio construction. Nor Rejina Abdul Rahim, the managing director of Nomura Asset Management Malaysia and country head, commented on the company’s AI fund plan. He expressed the company’s joy in response to the fund’s incredible performance, which surpassed that of Japan’s Topix. This situation happened despite the tough times experienced in February.

In his remarks, Nor Rejina Abdul Rahim asserted that the returns of funds that use artificial intelligence are much higher than those utilizing conventional methods, particularly for decision-making. In addition, Nomura looks forward to unveiling its international version of the AI fund strategy come this June.

During the Nomura Asset Management Malaysia (NAMM) 2018 Breakfast Conference, Nor Rejina told reporters that artificial intelligence (AI) helps portfolio managers in maneuvering the markets better since human beings are emotion-driven. For him, AI gets rid of emotions during the decision making process in a bid to make better investment choices that are not clouded by emotional judgment, as it is the case for humans. Furthermore, artificial intelligence (AI) boasts the ability to process a significant amount of data in comparison to humans, which enables it to produce patterns that can be used in making investment decisions.

According to a statement by Tsuyoshi Ogawa, the senior investment officer of Nomura Asset Management, artificial intelligence (AI) boosts the process of decision making, especially for portfolio construction. He argued his point by saying that human beings can remember only short-term things, which impairs their capacity to make well-informed decisions. On the other hand, artificial intelligence can gather a large volume of information spanning 80 years back. For this reason, it becomes easy for Nomura Asset Management to make better decisions based on the data it has collected over the years in its line of work.

Nor Rejina Abdul Rahim, the company’s managing director, said that the company sees impressive positive developments and expects the model to transform significantly in terms of both complication and sophistication. He also added that most of the existing unstructured data today would later be part of the investment management’s activities. Rejina emphasized his point by stating that before, Nomura Asset Management only focused on its financials.

Nomura Asset Management‘s senior investment officer, Tsuyoshi Ogawa explained that artificial intelligence (AI) boasts a holistic perspective. To stress his point, he said AI takes into account several factors such as the company’s employee sentiment, market perception as well as its financials. On the other hand, Nor Rejina added that Nomura Asset Management was interested majorly in an all-inclusive type of information as opposed to just looking at the numbers.

By focusing on a wide range of aspects relating to the company other than just figures, Nomura Asset Management can make better positive decisions. The beauty of such well-informed choices is that they will cut across various parts of the company rather than just some. As such, Nomura has a better chance of achieving its investment goals by relying on AI.

Source Sundaily

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