Using Artificial Intelligence to Improve Returns in Asset Management
Can machine learning-based technology overcome the many human behavioural biases to improve investment portfolio returns? Hedge funds and other asset management companies today deploy varying degrees of use of technology. At some firms things still feel fairly conventional. Portfolio managers make investment decisions, manually enter trades at the desk, where dealers will size up the incoming order and call up a reliable bank counterparty to get it done on optimum terms. Within more technologically advanced firms, there may be none of this dialogue, as almost everything, from portfolio management to order entry and execution, is done electronically. The humans who remain are merely guardians of the machines, stepping in when markets get dicey or trades need rerouting. Though these machines are most likely not learning, with the goal of optimising trading and improving returns. They are simply automating trading. Automated trading was just the beginning This is a gradual shif...