Wilshire Indexes Press Center

November 14, 2023

Wilshire Indexes and Rayliant Global Advisors Use AI to Create Next Generation of Smart Beta Indexes

Harnessing machine learning and AI, the index series aims to better capture equity premiums from a robust universe of factors potentially leading to more stable systematic return harvesting.

LONDON, 14 November – Wilshire Indexes, a leading global benchmark platform, and Rayliant Global Advisors, today announced the launch of the FT Wilshire NxtGen Index Series. Harnessing machine learning and AI, the index series aims to better capture equity premiums from a robust universe of factors potentially leading to more stable systematic return harvesting.

While changing market dynamics are increasingly disrupting global investment, technology has opened the door to new index construction methods, making possible new diversified and global approaches to smart beta. Employing machine learning and AI to construct a modern, robust multi-signal index series, the FT Wilshire NxtGen Index Series spans developed and emerging global equity markets, offering investors a comprehensive, investable, transparent and modular alternatively-weighted index series.

Jason Hsu, founder & CIO of Rayliant, said, “AI and machine learning have emerged as the key to advancing and unlocking the next generation of smart beta. We are excited to partner with Wilshire Indexes and believe the FT Wilshire NxtGen Index Series innovative construction approach which leverages our joint expertise provides global investors with a modern replacement to their legacy smart beta allocations or potential use as a dual-core approach.”

The FT Wilshire NxtGen Index series utilizes robust machine learning and AI models of expected return within a mean-tracking error framework. More than 100 stock-level fundamental and market characteristics from 12 major factor categories are used to estimate quarterly future stock risk-adjusted returns. This list of fundamental and market characteristics is in close alignment with those described in the academic literature and are reviewed on a quarterly basis. This approach mitigates the impact of single characteristic underperformance, provides access to a diversified universe of fundamental characteristics to identify an optimal allocation and maximizes expected risk-adjusted return.

Mark Makepeace, CEO of Wilshire Indexes, said, “New technologies together with improvements in data science allow us to implement classical financial theory more effectively.  This is an exciting development and will help global investors continue to explore ways to use AI and machine learning to drive value, capture new opportunities across markets and differentiate themselves from competitors. The FT Wilshire NxtGen Index Series, developed with Rayliant Global Advisors, creates the next generation of smart beta and alternatively weighted index offerings.”

Additional information on the FT Wilshire NxtGen Index Series can be found here: https://www.wilshireindexes.com/products/ft-wilshire-alternative-index-series

About Rayliant Global Advisors

Rayliant develops innovative investment strategies that bring together elements of behavioral finance, data science, and local market insights. Rayliant’s strategies were used to manage $17.8 billion as of September 30, 2023. Its clientele includes institutional and high net worth investors globally. The firm has offices in Hong Kong, Los Angeles, London, Shanghai, Hangzhou, and Taipei. For more information about Rayliant, please visit www.rayliant.com.

About Wilshire Indexes

Wilshire Indexes is a global benchmark platform that provides institutional investors, asset managers and retail intermediaries unmatched flexibility in solving benchmarking, portfolio construction, and risk management challenges. Transforming the way investors use benchmarks to meet their objectives, Wilshire Indexes provides global coverage of the markets through the leading FT Wilshire Index Series. Combining new technology and modular products in a growth-aligned commercial model designed for collaboration, efficiency, and speed to market, Wilshire Indexes offers a completely new way to work with an index provider. For more information: www.Wilshireindexes.com