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The asset management industry is moving at the same pace as the planet as a whole.
Increased digitization and the use of digital tools is taking hold. Artificial intelligence is making its way into the financial industry and one of the debates is whether it can end up doing away with the figure of the manager and whether, in addition, it is the key factor on which indexed management – an investment strategy based on replicating indexes – is focused.
Business Insider Spain has exclusively interviewed Unai Ansejo, CEO of Indexa Capital, a fintech focused on indexed management and with a growing volume of clients, to discuss this series of questions about the future of the investment scheme, as well as delving into the expansion of its range of products with the launch of occupational pension plans.
Focusing on the advantages of artificial intelligence when it comes to managing the assets in which to invest Ansejo expounds that from his professional experience he realizes that long-term savings is not about using an algorithm that beats others, but rather about greatly reducing costs, diversifying and being invested in different areas.
“I’m incredulous of these things,” he relates about nonparametrics. “I have analyzed many quantitative investment funds for more than 20 years and they always seemed very good, but then there came a time when something happened or there was any problem,” he adds.
Therefore, as he explains, in the end, artificial intelligence is a very broad concept, but they would still be algorithms in which you create a series of entry points to then find an exit.
“What happens is that the process by which inputs become outputs is a black box: you don’t know,” he says.
At Indexa Capital, they don’t use artificial intelligence to build investment models but instead focus on criteria they think are reasonable for how portfolios should be constructed over the long term: diversify a lot, reduce costs, incorporate the effect of direct taxes into portfolio construction. “In my view, AI as such is not the best way to obtain long-term performance,” he notes.
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Ansejo assures, however, that in the fintech they use technology a lot: “Our goal is that half of our team are technical profiles such as engineers, analysts or developers and we use technology for what needs to be done: automating processes where a person does not contribute any value”.
For example, something that automates, as he relates, is that, once the client’s portfolio is configured, based on their risk profile, they apply an algorithm that is public to guide how the allocation of their investors should be. “When you already have a model portfolio the daily management of your portfolio, or the request for a withdrawal to find the best fund in which there is a lower tax impact can be automated,” he explains.
The Indexa Capital CEO asserts that you can’t automate portfolio construction.“You can’t ask a computer or a machine what to invest in because there are many parameters to take into account,” he says.
In this way, Ansejo reveals that to build their portfolios they carry out a quarterly review in which they try to see, among other things, if there is a new asset class in which they can invest cheaply and efficiently.
The new bet to attract more clients: occupational pension plans.
On the other hand, Indexa Capital has expanded its range of indexed products by incorporating occupational pension plans. “We do it with indexing because we think it’s the best way to maximize your options to monetize a portfolio over the long term,” he says. “What we have is 32,000 clients for whom this proposition works,” he adds.
Along these lines, Ansejo says that they have had pension plans for 4 years and with a very clear vocation: that they should be indexed because they are cheaper. However, they saw that, apart from individual plans, in employment plans (where it is the company that creates a payment plan and contributes for the worker) the solutions available were once again very analogical. “Everything with a lot of paper and regulatory information,” he describes.
On the other hand, they were usually active management, oriented towards SMEs and high costs. “ So we decided to launch it to make it easier for an SME to have a plan quickly and online, and we did so by incorporating another feature, which is the life cycle,” he says.
Ansejo confirms that they incorporated a large dose of innovation: that it could be done digitally, low costs and life cycle. “So, the response we are having is very good, although the amount we have is small, it is normal because in the end, when you create an employment plan you are contributing little by little to your employees,” he says.
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