Machine-driven investing: the future of portfolio management?

AI_investingThe artificial intelligence tipping point for portfolio management is not here yet, but the technology’s role in emulating human investment decision-making processes is becoming more prevalent in the fund industry.

According to Boyan Filev, portfolio manager of Aberdeen Standard Investment’s Artificial Intelligence Global Equity Fund, success breeds popularity.

“It was the same for ETFs [exchange-traded funds] and I don’t think it will be any different here before it becomes more widely adopted,” he recently told Funds Europe.

If the application of AI in portfolio management is perfected, many fund managers may find themselves seeking other means to stay relevant in an increasingly digitised world. 

But the rise of artificial intelligence in asset management is not set to eliminate the role of humans any time soon. Applying AI in portfolio management is yet to take off on a wider scale, despite increasing use of the technology overall. As Filev says, players in the industry are watching from the sidelines to see how successful an AI-driven fund can be in terms of performance. 

The human input is also still essential to developing the AI systems used to navigate global stock markets.

“Having that initial human input helps us understand how the algorithm reaches a certain decision, and what the variables are that go into the decision,” explains Filev.

Read the full article from our November issue here: Artificial intelligence: Gateway to Wonderland

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