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Supplements » Smart Beta 2018

EDITORIAL: The hunt for return

Mark_LathamIn the week that this report went to press, Aberdeen Standard Investments launched a fund that will be run by artificial intelligence. It is hoped that the use of a machine-learning computer, which will crunch reams of market data in an attempt to identify trends known as factors, will help to improve investment returns.

The Edinburgh-based firm is putting a lot of trust in the computer, claiming that humans will have no input into the investment decision-making process. If the computer decides to overweight emerging markets, for example, human fund managers will not override it.

The Artificial Intelligence Global Equity Fund will hold about 150 stocks and around 10% of the portfolio will be traded each month.

The aim is that the fund will outperform its benchmark, the MSCI All Countries World Index, by 4% to 6% a year. If it achieves that objective and reaches its target size of $10 billion, human stock-pickers, who have just endured a torrid decade, might start to feel even less secure about their future prospects in the industry.

Mark Latham, associate editor of Funds Europe

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