Most investors believe systematic strategies helped them navigate challenging market conditions in 2022.
Invesco study reveals that the artificial intelligence (AI) revolution is already underway: half of systematic investors have integrated AI into the investment process and the majority (75%) expect AI to match or exceed importance of traditional investment analysis within a decade. AI is mostly used to understand market trends and to optimize portfolio allocations; investors see potential in testing investment strategies and monitoring and adjusting trading positions in real-time. 41% of respondents are using natural language processing for sentiment analytics, with three-quarters expecting to use it in future. Systematic investing is evolving: investors are broadening their systematic toolkits by using more diverse strategies. ‘Growth’ becomes an established factor.
Dubai, 31 October 2023 -Invesco today released the findings of its eighth annual Invesco Global Systematic Investing Study. The Invesco Global Systematic Investing Study is an evolution of the Invesco Global Factor Investing Study, published annually since 2016. The reposition this year reflects the changes within the quantitative investing world, and the use of quantitative methods beyond just factors. The study, which is based on the views of 130 institutional and wholesale investors that collectively manage $22.5 trillion in assets, also finds a growing consensus that the systematic toolkit can help investors navigate key challenges, such as volatile markets and imperfect data.
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The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.
Views and opinions are based on current market conditions and are subject to change.
In the study, all respondents were ‘systematic investors’, defined as investors that employ structured, rules-based quantitative models and algorithms to make investment decisions and build portfolios. We deliberately targeted a mix of investor profiles across multiple markets, with a preference for those that were larger and/or more experienced.
In 2023 we conducted interviews with 130 different pension funds, insurers, sovereign investors, asset consultants, wealth managers and private banks globally. Together these investors are responsible for managing $22.5 trillion in assets (as of 31 March 2023). This core study was supplemented with 30 additional in-depth interviews with highly experienced systematic investors.
Institutional investors are defined as pension funds (both defined benefit and defined contribution), sovereign wealth funds, insurers, endowments and foundations. Wholesale investors are defined as discretionary managers or model portfolio constructors for pools of aggregated wholesale investor assets, including discretionary investment teams and fund selectors at private banks and financial advice providers, as well as discretionary fund managers serving those intermediaries.
The fieldwork for this study was conducted by NMG Consulting between April and June 2023. Invesco is not affiliated with NMG Consulting.
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This document is issued by Invesco Asset Management Limited, PO Box 506599, Index Tower – Level 6, Unit 616, DIFC – Dubai, UAE. Regulated by the Dubai Financial Services Authority.
