The Revolution in Investing Powered by Generative AI

With the advancements in the growing sphere of AI, there are new avenues to expand your investing options. These are some ways to make generative AI work for you.

The recently-released sci-fi thriller The Creator tackles the very question in all our minds – where do we draw the line between humans and AI? The film is fictional but feels real because it hits home. It makes us think about how we can best harness the power of AI to help us in every aspect of our lives. The plot tackles the delicate issue of striking a balance between the two worlds (ok, we’ll stop here to avoid spoilers).

While the film takes place in the future, we can already see how big AI’s role is in how we work and play. Routine and mundane task are completed with just a single prompt, and if you’re in the creative sector, you know how AI can help you brainstorm ideas when you’re facing writer’s block. Finding your YouTube recommendations too accurate? That’s AI reading your mind. Just kidding! Or maybe not?

ChatGPT has generated a lot of buzz, and justifiably so. There’s just so much potential. Within just five days of its launch, it managed to attract a million users. Compare that to other platforms that generated a lot of hype.



Source: Company announcements via Business Insider/Linkedin

The AI world is moving fast. Tech industry giants Nvidia and Foxconn have joined forces to build “AI factories”, an innovation in data centres that uses Nvidia chips to power a wide range of applications like autonomous vehicles, robotics platforms, and large language models.

Generative AI is, without a doubt, a breakthrough. It has proven its use in the business world to help drive profitability, driven by its ability to generate new, realistic content and models from training data. Generative AI algorithms are built on top of foundation models that are trained on vast quantities of unlabeled data, using self-supervised techniques to uncover patterns for various tasks. It has reached a maturity level where users can enter complex inputs to get an equally complex output which is usable to improve effectiveness and creativity.



Source: T. Rowe Price, October 2023

A notable example of generative AI’s power is the year-to-date performance of the US market. Most of this strength comes from seven stocks that leverage it. These companies include Apple, Microsoft, Alphabet, Tesla, Amazon, Facebook (Meta), and Nvidia.

Exploring the AI landscape and building blocks

To focus on generative AI, let's explore the key sectors that make up its building blocks. The industry is likely in the early stages of a growth curve, where gamechangers drive the momentum.

It has impacted many different sectors and ways of business. Below are some companies offering products based on generative AI.

BASE10 Trend Map: Generative AI

Companies are group based on medium produced and segmented by us within each medium. Companies that offered products across segments are grouped in the segment of the core product offering.

Source: Wellsaid Labs

Although most generative AI companies are based in the West, it’s essential not to overlook investment opportunities in Asia. Let’s create an overview of the AI landscape. While this diagram is not exhaustive, it provides a useful guide for identifying direct and indirect players in the Asian markets.



Source: RHBAM as of July 2023
Potential generative AI solutions for you

We shouldn’t just discuss these matters without devising a strategy to help you harness the power of generative AI. Below are some options that we have created that you can include in your diversified portfolio.



Source: Novagni, 2023

Year-to-date basis, both TA Global Technology and RHB Global Artificial Intelligence fund has shown double-digit returns. With market consolidation in Q4 2023, an opportunity arises for investors to accumulate exposure to technology-related assets for long-term investment prospects. Stay updated with the latest investment insights and determine the most suitable products and portfolio allocation. Reach out to an RHB Relationship Manager to explore how we can help you participating in the Generative AI mega trend.



Source: Refinitiv, November 2023



Disclaimer:
A Product Highlights Sheet (PHS) highlighting the key features and risks of the RHB Global Artificial Intelligence Fund dated 15 December 2022, RHB i-Sustainable Future Technology Fund dated 30 May 2023, and TA Global Technology Fund dated 30 October 2023 is available and investors have the right to request for a PHS. Investors are advised to obtain, read and understand the PHS and the contents of the Information Memorandum and its supplementary(ies) (if any) (“the Information Memorandum”) before investing. The Information Memorandum has been registered with the Securities Commission Malaysia who takes no responsibility for its contents The SC’s approval and authorization of the registration of the Information Memorandum should not be taken to indicate that the SC has recommended or endorsed the Fund.

Amongst others, investors should consider the fees and charges involved. Investors should also note that the price of units and distributions payable, if any, may go down as well as up. Where a distribution is declared, investors are advised that following the issue of additional units/distribution, the NAV per unit will be reduced from cum distribution NAV to ex distribution NAV. Any issue of units to which the Information Memorandum relates will only be made on receipt of a form of application referred to in the Information Memorandum. For more details, please call 1 800 88 3175 for a copy of the PHS and the Information Memorandum or collect one from any of our branches or authorised distributors. Investors are advised that investments are subject to investment risk and that there can be no guarantee that any investment objectives will be achieved. Investors should conduct their own assessment before investing and seek professional advice, where necessary and should not make an investment decision based on this presentation slides solely. Subscription of units of the Fund is only open to sophisticated investors.

The manager wishes to highlight the specific risks of RHB Global Artificial Intelligence Fund are General Market Risk, Currency Risk, Emerging Markets Risk, Liquidity Risk, Company-Specific Risk, Concentration Risk, Volatility Risk, Derivatives Risk, Sector and Theme Fund Risk. The specific risks of RHB i-Sustainable Future Technology Fund are Fund Management Risk, Redemption Risk, Loan/Financing Risk, Risk of Non-Compliance, Returns are Not Guaranteed Risk, Risk of Termination of the Fund, Inflation Risk, Market Risk, Liquidity Risk, Islamic Financial Derivatives Risk, Shariah-Compliant Equity-Related Securities Risk, Profit Rate Risk, Default Rate & Credit Risk, Technology-Related Companies Risk, Sustainability Risk, Smaller Companies Risk, Currency Risk, Country Risk, Concentration Risk, Reclassification of Shariah Status Risk. The specific risks of TA Global Technology Fund are Fund Management of the Target Fund Risk, Sector Investment Risk, Currency Risk, Counterparty Risk, Temporary Suspension of the Target Fund Risk and Distribution Out of Capital Risk. The specific risks of RHB Global Artificial Intelligence Fund are General Market Risk, Currency Risk, Emerging Markets Risk, Liquidity Risk, Company-specific Risk, Concentration Risk, Volatility Risk, Derivatives Risk, and Sector & Theme Fund Risk. The specific risks of the RHB i-Sustainable Future Technology Fund are Fund Management Risk, Redemption Risk, Loan/Financing Risk, Risk of Non-Compliance, Risk of Termination of the Fund, Inflation Risk, Market Risk, Liquidity Risk, Islamic Financial Derivatives Risk, Shariah-Compliant Equity-Related Securities Risk, Profit Rate Risk, Default & Credit Risk, Technology-Related Companies Risk, Sustainability Risk, Smaller Companies Risk, Currency Risk, Country Risk, Concentration Risk, Reclassification of Shariah Status Risk.

Investors are advised to read and understand content of the relevant documents including but not limited to prospectus or information memorandum that has been registered with Securities Commission and Product Highlight Sheet before investing. Investors should also consider all fees and charges involved before investing. Prices of units and income distribution, if any, may go down as well as up; where past performance is no guarantee of future performance. Units will be issued upon receipt of the registration form referred to and accompanying the Prospectus. The printed copy of prospectus and Product Highlight Sheet is available at RHB branches/Premier Centre and investors have the right to request for a Product Highlight Sheet.

This material has not been reviewed by the Securities Commission Malaysia (SC).

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