Investors look to shelter portfolios from rising AI concentration risks - FT中文网
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Investors look to shelter portfolios from rising AI concentration risks

Fund managers see hedge funds and emerging markets assets as bulwarks against sudden shift in sentiment on artificial intelligence
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{"text":[[{"start":7.8,"text":"Investors are hunting for strategies that will protect their portfolios against too much exposure to AI, as financial markets and the wider US economy become increasingly dependent on the health of the booming sector."}],[{"start":20.85,"text":"US equity and credit markets have become increasingly concentrated in AI-related companies. More than two-thirds of groups on the Russell 1000 index of large US groups are linked to AI, either directly or because the technology is becoming embedded in their business models, according to Citigroup research. "}],[{"start":38.7,"text":"At the same time, Big Tech “hyperscalers” and companies that are beneficiaries of the AI spending boom make up around 16 per cent of the US high-grade bond market after a huge borrowing binge in recent years, JPMorgan data shows. That makes them the biggest grouping in the investment-grade market."}],[{"start":57.400000000000006,"text":"The dominance of AI across equities and credit markets presents a growing challenge to fund managers, who say they are looking to track down assets and strategies not exposed to sudden shifts in sentiment on the technology. "}],[{"start":70.60000000000001,"text":"“Clients are revisiting the way they need to diversify,” said Vincent Mortier, chief investment officer at Amundi. The AI theme is “very powerful”, he noted, but a curveball such as a “big revision in earnings” could cause it to change direction. “It’s not imminent,” he said, but “I think it will come.”"}],[{"start":88.45000000000002,"text":"Ryan Marshall, BlackRock’s global head of multi-asset strategies and solutions, said that “trying to build portfolios where we’re bringing in independent, uncorrelated sources of return is absolutely in demand”."}],[{"start":101.25000000000001,"text":"One of the challenges “for multi-asset portfolios where you’re trying to bring in breadth and diversification”, he added, “is the concentration in AI-related exposures”."}],[{"start":111.70000000000002,"text":"“[Then] there’s just this second concentric circle of suppliers to that, which could be power-related, infrastructure-related, supply-chain-related,” he said, while “we also have this general economic growth correlation with AI right now.”"}],[{"start":125.50000000000001,"text":"Marshall noted that “this phenomenon is leading people to private asset classes, hedge funds, other areas of the market with lower correlations”."}],[{"start":134.35000000000002,"text":"In the hedge fund sector, he pointed to “managers who can demonstrate that the return streams that they are producing are independent of, or uncorrelated with” broader debt and equity market risks, including those running global macro and equity long-short strategies."}],[{"start":149.90000000000003,"text":"Mortier agreed that hedge funds were “big time” becoming more attractive to clients, but “the issue here is the hedge fund community is super diverse . . . [The challenge] is to find the right strategies and the right managers that are still open to taking money.”"}],[{"start":165.30000000000004,"text":"The Amundi investment chief added that clients are also “considering more and more emerging markets at large” — including local currency stocks and bonds, such as Latin America, India and China among others. "}],[{"start":180.35000000000005,"text":"Another popular avenue was, he said, “to go back to some fundamental real assets” where “you have something tangible”, noting that “mining is an interesting spot” while “renewables as well [are] a kind of diversification”."}],[{"start":193.50000000000006,"text":"Daniel Gamba, co-president and chief commercial officer at Franklin Templeton, said designated investment teams were assessing AI as a driver of returns, similar to other so-called factors such as value, momentum and growth, in a bid to build portfolios “with the least exposure to the volatility of AI”. "}],[{"start":212.45000000000005,"text":"“There’s more systematic [hedge fund] demand,” he added. “We see that also ourselves; our systematic business is growing. And there’s more factor diversification demand related to AI.”"}],[{"start":223.15000000000003,"text":"“We’re still positive [on] US equities,” noted Gamba, though “less bullish than at the beginning of the year, for sure” and “not just concentrated on the few companies who are investing close to $1tn on AI infrastructure.”"}],[{"start":235.50000000000003,"text":"“[We’re] clearly trying to look for diversified exposure.” "}],[{"start":239.50000000000003,"text":"Franklin was also positive on Japan and a number of EMs, he said, while in fixed income, it is looking at bonds with shorter maturities and “not really taking any big rate risk on the long end other than when people are looking for income.”"}],[{"start":254.05000000000004,"text":"“I would say just be careful about your factor diversification risk, and be careful about being just too exposed to just AI in your companies,” said Gamba. “Be a bit more defensive,” he added, though he noted that “we don’t think it’s going to be anything imminent that will trigger a big sell-off.”"}],[{"start":271.85,"text":"Still, referring to an infamous quote from former Citigroup boss Chuck Prince to the FT in July 2007 — shortly before the onset of the global financial crisis — Mortier cautioned that “we are a little bit in this environment today; the music plays, and people are still dancing.” "}],[{"start":289,"text":"“The music will stop playing at a moment in time. But the timing is so difficult to predict, so that’s why diversification is more than ever necessary.”"}],[{"start":308.25,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1791183247_3923.mp3"}

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