Employing Artificial Intelligence
Why Artificial Intelligence (AI) for Asset Management?
Artificial Intelligence (AI) is being used on a daily basis in science, engineering, economics, robotics, voice recognition, spell-check, weather forecasting and many other applications. It has been used in various forms for over 20 years by successful institutional investors and hedge fund managers. AI is now finding its way into traditional asset management and financial advisory services and holds out the promise of adding emotionless, scientific, and systematic elements to asset allocation and portfolio construction. Financial advisors, portfolio managers, and individual investors will be well-served to learn more about how AI is being used in today's financial services marketplace…and how they may benefit from this revolution.
The LHA Market State Alpha Index and the LHA Market State Tactical U.S. Equity Index are constructed using Bayesian statistical techniques that analyze the evolving distribution of return in the S&P® 500 to assess both short-term and long-term changes in price direction. Constructed with the aim of reducing the negative impact of market down-drafts, while enhancing return in market rallies.
S&P Dow Jones Indices LLC calculates and maintains the LHA Market State Indices. The LHA Market State Alpha Index (LHAMSI) is designed to react to changes in market conditions, varying net exposure to the S&P 500 between 200% long and 200% short the S&P 500 and can react to market changes even on a daily basis. The LHA Market State Tactical U.S. Equity Index (LHAMSTI) is also designed to react to changes in market conditions, varying net exposure to the S&P 500 between 0% and 160%.
Each of the LHA Market State™ Alpha Index and the LHA Market State™ Tactical U.S. Equity Index (each an “Index” and collectively the “Indices”) is the property of Little Harbor Advisors, LLC, which has contracted with S&P Opco, LLC (a subsidiary of S&P Dow Jones Indices LLC) to calculate and maintain the Index. The Index is not sponsored by S&P Dow Jones Indices or its affiliates or its third party licensors (collectively, “S&P Dow Jones Indices”). S&P Dow Jones Indices will not be liable for any errors or omissions in calculating the Index. “Calculated by S&P Dow Jones Indices” and the related stylized mark(s) are service marks of S&P Dow Jones Indices and have been licensed for use by Little Harbor Advisors. S&P® is a registered trademark of Standard & Poor's Financial Services LLC (“SPFS"), and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). It is not possible to invest directly in an index.