AllianceBernstein uses AI to sidestep ‘growth trap’

Random forest model aims to sort success stories like Amazon and Netflix from fast-growth losers

MIKI Yoshihito

It’s one of finance’s nagging anomalies. In study after study quants have shown that high-growth companies tend to persistently underperform those that expand at a more conservative pace. The so-called asset growth effect has never been fully explained, and is viewed with suspicion by non-quant growth managers.

“The problem is that when I tell my growth manager, ‘You shouldn’t be buying this company because it’s growing its assets at an exceptionally high rate,’ they are just going to dismiss

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Asset-liability management: Special report 2023

There is nothing new about the dynamics behind the ALM banking crisis of earlier this year: maturity transformation, liquidity risk and interest rate risk are at the heart of the traditional banking business model. But these old threats have been given…

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