April 11, 2024
At Bristol Gate, we are committed to integrating leading-edge technology across our firm. Since the beginning, we have believed in using data management techniques to help predict dividend growth. Our prediction journey began in 2009 with a linear regression model. By 2014, access to advanced technology allowed us to begin applying Machine Learning and since 2017, we have been using Artificial Intelligence (AI) to help generate an analytical edge. Our team of data scientists has a long, successful track record of accurately predicting a company’s future dividend growth, which has given us insight into how AI can successfully be integrated into a fund’s investment process.
With the recent surge in popularity of AI and generative technologies, AI has become a buzzword many firms are using to attract investors. It’s crucial for investors to discern between genuine innovation and mere hype. When evaluating a fund or a company that claims to use AI, consider the following:
1. Ask for the AI Model’s Backtest: The backtest results of an AI model should be separate from the portfolio’s performance. A backtest will show you if the AI model effectively addresses the problem it’s supposed to solve.
2. Inquire About Data Preprocessing: Seek to determine a firm’s data handling process: How do they transform raw data for the model? This process can help reveal the sophistication of their approach.
3. Question the AI Model Fine-Tuning: How a firm fine-tunes a model can indicate their commitment to maintaining and improving AI capabilities.
4. Future Roadmap for the AI Model: Continuous improvement is a good sign of a firm’s dedication to leveraging AI effectively and the plans for the model should show this.
5. Model Explanation and Transparency: A reputable firm should be able to explain how their AI model makes its decisions. This transparency is crucial for trust and understanding the model’s reliability.
As you navigate the investment landscape, it’s essential to discern the real AI-driven opportunities from the hype. At Bristol Gate, we pride ourselves on our authentic application of AI. Our approach is about more than just using technology; it’s about intelligent integration to create real value for our investors.
Important Disclosures
There is a risk of loss inherent in any investment; past performance is not indicative of future results. Prospective and existing investors in Bristol Gate’s pooled funds or ETF funds should refer to the fund’s offering documents which outline the risk factors associated with a decision to invest. Separately managed account clients should refer to disclosure documents provided which outline risks of investing. Pursuant to SEC regulations, a description of risks associated with Bristol Gate’s strategies is also contained in Bristol Gate’s Form ADV Part 2A located at www.bristolgate.com/regulatory-documents.
This piece is presented for illustrative and discussion purposes only. It should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities and it does not consider unique objectives, constraints, or financial needs of the individual. Under no circumstances does this piece suggest that you should time the market in any way or make investment decisions based on the content. Investors are advised that their investments are not guaranteed, their values change frequently, and past performance may not be repeated. References to specific securities are presented to illustrate the application of our investment philosophy only, do not represent all of the securities purchased, sold or recommended for the portfolio, it should not be assumed that investments in the securities identified were or will be profitable and should not be considered recommendations by Bristol Gate Capital Partners Inc. A full list of security holdings is available upon request. For more information contact Bristol Gate Capital Partners Inc. directly. The information contained in this piece is the opinion of Bristol Gate Capital Partners Inc. and/or its employees as of the date of the piece and is subject to change without notice. Every effort has been made to ensure accuracy in this piece at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and Bristol Gate Capital Partners Inc. accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. We strongly recommend you consult with a financial advisor prior to making any investment decisions. Please refer to the Legal section of Bristol Gate’s website for additional information at bristolgate.com.
A Note About Forward-Looking Statements
This report may contain forward-looking statements including, but not limited to, statements about the Bristol Gate strategies, risks, expected performance and condition. Forward-looking statements include statements that are predictive in nature, that depend upon or refer to future events and conditions or include words such as “may”, “could”, “would”, “should”, “expect”, “anticipate”, “intend”, “plan”, “believe”, “estimate” and similar forward-looking expressions or negative versions thereof.
These forward-looking statements are subject to various risks, uncertainties and assumptions about the investment strategies, capital markets and economic factors, which could cause actual financial performance and expectations to differ materially from the anticipated performance or other expectations expressed. Economic factors include, but are not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. Readers are cautioned not to place undue reliance on forward-looking statements and consider the above-mentioned factors and other factors carefully before making any investment decisions. All opinions contained in forward-looking statements are subject to change without notice and are provided in good faith. Forward-looking statements are not guarantees of future performance, and actual results could differ materially from those expressed or implied in any forward-looking statements. Bristol Gate Capital Partners Inc. has no specific intention of updating any forward-looking statements whether as a result of new information, future events or otherwise, except as required by securities legislation.
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