Introducing AiPEX6, an Artificially Intelligent Index with IBM WatsonTM

AI Powered Investing

The AI Powered US Equity Indexes are the first and only rules-based equity strategies to use IBM Watson to turn data into investment insight.

AiPEX6 is a risk controlled, excess return index comprised of approximately 250 U.S. publicly traded companies, adjusted monthly, that is intended to provide growth through a variety of market conditions. Access to AiPEX6 is available through a variety of HSBC Structured Investment solutions.



HSBC AiPEX6 Resources

These client approved materials provide an in depth overview of the performance and strategy that drives AiPEX6.

Performance:
Historical & Simulated

The AI Powered US Equity Index 6 would have provided growth through a variety of market environments due in part to a monthly equity selection process intended to adapt to market changes and mitigate potential risks. While real-time calculations began on November 19, 2019, the graph below illustrates how AiPEX6 would have provided long-term positive returns with low volatility.





AiPEX6

6.14%
compound
annual return


SPXT5UE
4.29%
compound
annual return


Key Statistics and Characteristics

Index returns as of
12/31/2019
AI Powered US
Equity Index 6 (ER)
YTD 5.70%
1 Y 5.70%
3 Y 20.49%
5 Y 26.65%
10 Y 81.54%
Volatility since inception1 5.75%
Bloomberg Ticker AiPEX6 Index
Asset Class Equity
Currency USD
Launch Date November 19, 2019
Index Sponsor EquBot, Inc.
Calculation Agent Solactive AG
Index Fee2 0.85% per year

1Inception date as listed above is April 30, 2019
2AiPEX6 Index values shown here, and as calculated and published by Solactive AG, are a net of the 0.85% p.a. Index Fee.
The graph and table above sets forth the hypothetical back-tested performance of the Index from December 31, 2009 through November 19, 2019 and actual index performance thereafter through December 31, 2019. See the risk factors and "Use of Simulated Returns" herein.

AiPEX6 Index Strategy


AiPEX6 uses a 3-step equity selection process to create the monthly index portfolio.



Step 1: Scoring

Scores for the 1,000 largest U.S. companies are calculated based on:

Financial Health Score:
evaluates a company's fundamentals and key figures.
Management Score:
assesses a company's management strength and thought leadership.
News & Information Score:

measures a company's market sentiment, economic, and geopolitical risks.



Step 2: Select

Approximately 250 companies with the highest combined Financial Health, Management, and News and Information Scores are selected for the portfolio.



Step 3: Diversify

Companies are assigned portfolio weights, with the largest weights going to the companies with the highest combined scores (subject to diversification and market liquidity limits).



AiPEX6 daily risk control helps provide smoother returns.



AiPEX6 reacts daily to changing market conditions, as rapid movement in the market, or volatility, can create greater potential risk.


AiPEX6 reduces
the impact of short-term volatility in the equity markets through daily re-allocations between the equities selected by the AI algorithms and a cash component.


AiPEX6 seeks
a 6% daily volatility target. If the volatility falls below the target, the allocation to selected equities is increased up to a maximum of 150%. If the volatility is greater than the target, allocations to the selected equities may be reduced. Allocations below 100% to selected companies will be reallocated to a cash component.

For more information on the index methodology, please see the AiPEX6 Index Guideline and the AI Powered US Equity Base Index Guideline published by Solactive AG. Information contained in these Index Guidelines or otherwise available from Solactive is not incorporated by reference in, and should not be considered a part of, this website.


Next Steps


Investments in the AiPEX6 are available through HSBC Structured Products. Contact your Financial Professional about what HSBC AiPEX6 investments might help you achieve your financial goals.

Financial Advisors can view the current HSBC offerings linked to AiPEX6
click here


Financial Advisors not yet registered with HSBC, can register here