Focus: Echiquier Artificial Intelligence
By launching Echiquier Artificial Intelligence in June 2018, La Financière de l’Échiquier (LFDE) became the first French asset management company to offer a fund dedicated to this theme. Today, Artificial Intelligence (AI) saturates our economy and our lives, from recommendation algorithms to cybersecurity software, and soon in self-driving cars. The AI adventure is just beginning. By the decade’s end, this technology is expected to contribute more than $15 trillion to the global economy. Consistent with LFDE’s expertise, the management team is focused on the search for future economic leaders who are participating in or profiting from the AI boom.
This year, the inflation debate and the US Federal Reserve’s response has been the dominant influence on market performance. In 2021, the macro-economy has taken centre stage, relegating corporate fundamentals to the background. Despite this environment – which is unhelpful to our strategy generally, due to fears of an abrupt interest rate hike that could impact the valuation of innovative, fast-growing companies – the fund has focused on the accelerating AI boom. New positions have been taken in leaders like AFFIRM, whose Buy Now Pay Later service has taken the payment and credit sector by storm. This new solution offers consumers a free service for financing their purchases, as the next generations abandon credit cards en masse. This fund is also invested in TESLA, the innovation rock star that accelerated the market penetration of electric vehicles. We think the company’s technological and industrial breakthroughs are virtually impossible to keep up with, and its traditional competitors will struggle to regain their historical market shares on the old combustion-engine car market.
We launched Echiquier Artificial Intelligence in 2018 considering the recent alignment of the stars between big data (the resource), the cloud (the 21st-century factory), artificial neural networks (the method of production), and applications. More than three years later, each of these pillars is accelerating fast. Data is growing exponentially, the cloud is everywhere, artificial neural networks are doubling in size every two months, and apps are all over the world – and in space! We’re excited to invest in businesses that use AI, like LEMONADE, a next-generation insurance company that uses this technology in everything it does. AI vendors are also attractive, with stocks like ZOOMINFO, which provides algorithms that automate customer relations to make it more relevant and more powerful. This goes for AI infrastructure companies too, such as MONGODB and its new database architecture. Lastly, AI facilitators like NVIDIA continue to deliver solid performance while computing power grows on and on, exponentially.
In a universe currently made up of more than 300 stocks detected by our semantic algorithms, our qualitative investment process selects the most promising in terms of sustainable growth, strategic leadership, and technological innovation. Among the players matching the four AI categories, the management team prefers those for whom this technology will have the greatest amplifying effect. Finally, using strict valuation discipline, we can build and manage our positions within a conviction-based portfolio. Through this comprehensive approach, we invest in this universal technology all over the world, in all sectors and every size of company. The fund is invested in about thirty international securities with high growth profiles and significant potential to appreciate on the market. It is perfectly positioned to capture AI’s unmatched value creation. Now, you can invest in the future. We are at the dawn of the greatest technological and economic revolution in our history!
The fund is exposed mainly to the risk of loss of capital, equity risk and currency risk.
The securities and sectors mentioned above are given by way of example. There is no guarantee they will remain in the portfolio over time.
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