To take advantage of the potential within AI, and to meet the growing demand for AI investments, SEB Investment Management is now launching the SEB Artificial Intelligence Fund - a thematic fund focusing on companies that enable the use or development of artificial intelligence.
"We see great opportunities in this rapidly growing area and high demand for investments from customers who want to be part of the journey," says Andreas Wollheim, Head of Fundamental Equities at SEB Investment Management.
AI is the ability of machines to mimic human traits such as learning, reasoning, planning, and creativity. AI enables technical systems to perceive their environment, process information, and solve problems to achieve a specific goal. AI is currently revolutionising many different industries, making the technology a great point of interest, while also raising problematic questions, including how we can control it.
The fund, to be launched on 29 June, invests in companies that enable the use of AI for various purposes and in companies involved in AI development.
"We believe that these companies offer high return potential based on the rapid growth of the area and the potential to serve a larger function for more and more industries in the future," says Andreas Wollheim.
What distinguishes the companies the fund will invest in, besides belonging to the focus area of AI, is that they are high-quality growth companies. This means that the fund managers are looking for 'best of' companies with good profitability and business models that provide potential for continued growth. Another important criterion is that the companies apply high ethics in terms of personal integrity.
“The risks in these types of companies can be significant as they operate in a relatively new area with great potential, resulting in high valuations. This means that their stock prices can fluctuate more than the market. New potential regulations around AI can also pose a risk,” says Johan Söderström, who, together with his team in Global Fundamental Equities Management, manages the fund.
The fund managers apply fundamental analysis, which means that companies are thoroughly analysed through meetings with company management, among other methods. The fund managers also rely on an estimated value of the companies to make investment decisions. The fund invests globally and can invest in both the developed part of the world and in emerging markets.
It will initially consist of about 40 companies, with the intention of remaining a concentrated portfolio to ensure careful monitoring of the holdings. The fund does not have a size limitation regarding companies but will be dominated by large companies at launch, while also having the opportunity to include smaller upstarts in the niches that may arise in the new segment in the future. The fund is classified as Article 8, or light green, according to the EU's SFDR (Sustainable Finance Disclosure Regulation), which means it promotes sustainable characteristics.
"The launch of the fund is in line with our ambition to offer our customers thematic investment opportunities with a focus on innovative areas," says Kristina Hermann-Holst, Product Manager for fundamentally managed equity funds at SEB Investment Management.