M&G Investments has launched a fund targeting the “multi-year investment opportunity” around artificial intelligence (AI).
The M&G Global AI Themes fund will hold a portfolio of 50-70 companies selected for their potential in AI-driven revenue growth or profit margin expansion.
The fund categorises its investments into three segments: AI enablers, which provide the technology for AI solutions; AI providers, offering AI solutions to customers; and AI beneficiaries, companies that will use AI to enhance their products, services and processes.
The fund's launch comes at a time when AI is increasingly seen as a significant driver for long-term growth and a disruptive force in the global market. This investment strategy is designed to harness the vast economic impact of AI, projected to add between $2.6trn and $4.4trn annually in productivity improvements and efficiencies to the global economy.
Co-managed by Jeffrey Lin and Thomas Lee from M&G’s thematic technology equity investment team, M&G Global AI Themes will be seeded with an initial £20m investment from M&G. It aims to deliver a higher total return than the MSCI ACWI Index over any five-year period.
Lin said: “The disruptive power of technological innovation derives from its potential to create a better or cheaper product capable of growing a company’s market share or, indeed, a whole new market.
“As active investors, we focus on identifying the intersection between technological innovation and its implementation in business processes. Our background as computer engineers, and our continued tenure in the investment industry, equip us with the broad-based experience and expertise necessary to understand what it takes for a business to be very successful in this space.”
The strategy is available to UK-based investors as an OEIC – M&G Global AI Themes – and to international investors as a Sicav – M&G (Lux) Global Artificial Intelligence Fund. Both funds follow the same investment strategy and are managed by the same team.
The fund is also conscientious in its investment choices, applying exclusions related to thermal coal and controversial weapons, and setting revenue limits on investments associated with specific social and environmental sectors.