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28-09-2017, 07:47 PM
I came across this long and interesting read on the potential of learning-capable AI in achieving superior investment returns. What startled me was the performance of the AI, considering it is still in its nascent stage. Should it become more developed in a few years time, will there be more competition for us?
https://www.bloomberg.com/news/features/...ting-on-ai
The Massive Hedge Fun Betting on AI
Initially wary of the technology, Man Group was soon persuaded by the returns from algorithm-centric funds.
...
Over time, Granger built up the firm’s confidence in the technology. By 2015 artificial intelligence was contributing roughly half the profits in one of Man’s biggest funds, the AHL Dimension Programme that now manages $5.1 billion, even though AI had control over only a small proportion of overall assets. Elsewhere in the company—and in the industry as a whole—AI technology is being used to find the speediest way to execute trades, to make bets on market momentum, and to scan press releases and financial reports for keywords that could signal that a stock will rise or fall. Even Man’s very human discretionary division, where business is centered on experienced asset managers, is exploring AI techniques.
Those big clients Ellis was initially worried about clearly like what they’re seeing and have rushed to join Man’s algorithm-centric funds. All told, four Man funds collectively managing $12.3 billion are incorporating AI. Assets under management at Man have surged about 77 percent since the beginning of 2014. AHL Dimension fund assets have more than quintupled since then.
The firm has gone from viewing AI with skepticism to making it a cornerstone strategy. Among the company’s biggest expenditures now is computer equipment—along with hiring engineers to keep up with the technological change and the ensuing growth. AI is now not only out of the nuclear bunker but on a pedestal. “It went from a total isolation to ‘OK, you are allowed to sit at dinner with the rest of us, but don’t talk’ to the point where it’s become a part of the family,” Ellis says.
...
https://www.bloomberg.com/news/features/...ting-on-ai
The Massive Hedge Fun Betting on AI
Initially wary of the technology, Man Group was soon persuaded by the returns from algorithm-centric funds.
...
Over time, Granger built up the firm’s confidence in the technology. By 2015 artificial intelligence was contributing roughly half the profits in one of Man’s biggest funds, the AHL Dimension Programme that now manages $5.1 billion, even though AI had control over only a small proportion of overall assets. Elsewhere in the company—and in the industry as a whole—AI technology is being used to find the speediest way to execute trades, to make bets on market momentum, and to scan press releases and financial reports for keywords that could signal that a stock will rise or fall. Even Man’s very human discretionary division, where business is centered on experienced asset managers, is exploring AI techniques.
Those big clients Ellis was initially worried about clearly like what they’re seeing and have rushed to join Man’s algorithm-centric funds. All told, four Man funds collectively managing $12.3 billion are incorporating AI. Assets under management at Man have surged about 77 percent since the beginning of 2014. AHL Dimension fund assets have more than quintupled since then.
The firm has gone from viewing AI with skepticism to making it a cornerstone strategy. Among the company’s biggest expenditures now is computer equipment—along with hiring engineers to keep up with the technological change and the ensuing growth. AI is now not only out of the nuclear bunker but on a pedestal. “It went from a total isolation to ‘OK, you are allowed to sit at dinner with the rest of us, but don’t talk’ to the point where it’s become a part of the family,” Ellis says.
...
