Table of Contents
The Limitations of Professional Fund Managers
AI does better
Why is AI so powerful?
Better Accessibility
Reduce costs and entry barriers
Safer
Beyond Human
Summary of AI Portfolio Features
Summary
Home Technology peripherals AI AI performance beats traditional fund managers. Do you feel safe handing your money to AI?

AI performance beats traditional fund managers. Do you feel safe handing your money to AI?

Apr 08, 2023 pm 02:11 PM
AI ai

AI performance beats traditional fund managers. Do you feel safe handing your money to AI?

AI relies on larger and more diverse data sets to automatically analyze and select stocks, bonds, trading funds and other investment products, helping retail investors gain a better understanding of the financial market. The power of war.

With lower fees and looser portfolios, digital portfolios have gained an upper hand in the competition with fund managers.

Whether you have personal experience or not, we are dealing with AI every day. From asking Siri about the weather to in-car assisted driving functions, AI has penetrated into almost every aspect of our lives - and the investment field is no exception. AI even has the potential to surpass traditional fund managers in its ability to design investment portfolios.

AI performance beats traditional fund managers. Do you feel safe handing your money to AI?

The Limitations of Professional Fund Managers

Every day, professional fund managers spend a lot of time reviewing stock data, investment models and other key information to determine Whether a certain stock or other investment is suitable for inclusion in the fund's portfolio. This method is only suitable for actively managed investment funds, and its operation method is fundamentally different from index funds.

And even though Wall Street fund managers have to work more than 60 hours a week, they still cannot break through the limits of human ability. People need to sleep, and it is impossible to grasp the content and patterns of news and data as soon as they are released. There is only so much information that humans can remember and process, and there is basically no room for further improvement in work speed.

It is true that humans do many tasks better than computers. But with the advancement of AI and machine learning, these advantages may disappear one by one. At least when it comes to designing stock portfolios, AI is already several levels above the best that humans can achieve.

AI does better

The reason why AI can do better is because professional fund managers can only analyze the market through currently available information, but AI can use big data and Internet information builds highly complex models to accurately predict future market trends.

Specifically, the AI ​​investment portfolio relies on the "cluster model", which is to predict events that will occur in the future through asset allocation modeling. These models take large amounts of stock data, create scatter plots based on the absolute values ​​of relative risk in a portfolio, and arrange these scatter plots in a hierarchical structure. Of course, this is only one of the commonly used AI models in asset management, and there are many other model design ideas.

The models formed by these scatter plots will reflect future trends and can go beyond the linear correlation between stocks that most fund managers focus on and incorporate a series of non-linear relationships. This not only reduces investment risks, but is also expected to bring new opportunities to expand the market.

Why is AI so powerful?

Better Accessibility

Retail investors are often afraid to participate in active investment funds because the fees of such funds are much higher than those of popular low-cost index funds. AI investment portfolios can reduce handling fees and provide looser investment options, allowing retail investors to enter this new world that used to belong only to financial elites.

Reduce costs and entry barriers

Actively managed investment funds generally charge a variety of fees to investors. The most basic is a fixed annual fee. Affluent hedge fund investors often pay an annual fee equivalent to 20% of profits based on the actual investment scale.

Generally, the cost of AI investment portfolios is much lower than similar products managed by fund managers. In addition, AI funds have lower investment requirements and the annual fees are more approachable. Currently, the more popular mutual funds require a starting investment of at least US$5,000, but AI funds have greatly lowered this threshold.

Safer

Fund managers can only react to market dynamics after the fact, which is a typical "past determines the present". However, AI can provide dual risk prevention measures for market fluctuations and accurately assess future investment risks. AI investment portfolios can automatically reallocate funds based on potential risks, protecting investors' rights far faster than fund managers can react.

Beyond Human

Sometimes, retail investors and fund managers may have conflicting judgments on market trends. AI is capable of analyzing stock market transactions and financial data feeds, adjusting portfolios in near real-time, and even analyzing sentiment data from news summaries and forum posts. I believe everyone knows that a few seconds of advantage in automated trading often has a huge impact.

Summary of AI Portfolio Features

Of course, some friends must be worried that handing over investments to a completely virtual system sounds unreliable. Let’s take a look at what you need to pay attention to when choosing an AI investment portfolio:

Diversification of financial securities: AI investment portfolio should be able to sort out the market and focus on diversified stocks, bonds, and exchange-traded funds and other securities. A more diversified portfolio is better suited to the venture capital environment.

Data input quality: How good the data is, how good the AI ​​model is. Therefore, high-quality data sources must be carefully selected for AI investment models.

Transparent Portfolio Performance: Investment funds must meet reporting requirements and maximize information transparency beyond the basics. A good AI portfolio should help users understand how their investments are performing and compare the results to major market benchmarks.

Fees and entry barriers: Monthly/annual fees for AI portfolios, or other forms of minimum usage fees, should be lower than for traditional investment services.

Summary

With more diverse stocks, lower usage costs and faster response times, AI portfolios have begun to surpass traditional human fund managers. The subsequent lower entry threshold may mean that the era of financial inclusion in which retail investors are king is slowly beginning.

The above is the detailed content of AI performance beats traditional fund managers. Do you feel safe handing your money to AI?. For more information, please follow other related articles on the PHP Chinese website!

Statement of this Website
The content of this article is voluntarily contributed by netizens, and the copyright belongs to the original author. This site does not assume corresponding legal responsibility. If you find any content suspected of plagiarism or infringement, please contact admin@php.cn

Hot AI Tools

Undresser.AI Undress

Undresser.AI Undress

AI-powered app for creating realistic nude photos

AI Clothes Remover

AI Clothes Remover

Online AI tool for removing clothes from photos.

Undress AI Tool

Undress AI Tool

Undress images for free

Clothoff.io

Clothoff.io

AI clothes remover

AI Hentai Generator

AI Hentai Generator

Generate AI Hentai for free.

Hot Article

Repo: How To Revive Teammates
1 months ago By 尊渡假赌尊渡假赌尊渡假赌
R.E.P.O. Energy Crystals Explained and What They Do (Yellow Crystal)
2 weeks ago By 尊渡假赌尊渡假赌尊渡假赌
Hello Kitty Island Adventure: How To Get Giant Seeds
4 weeks ago By 尊渡假赌尊渡假赌尊渡假赌

Hot Tools

Notepad++7.3.1

Notepad++7.3.1

Easy-to-use and free code editor

SublimeText3 Chinese version

SublimeText3 Chinese version

Chinese version, very easy to use

Zend Studio 13.0.1

Zend Studio 13.0.1

Powerful PHP integrated development environment

Dreamweaver CS6

Dreamweaver CS6

Visual web development tools

SublimeText3 Mac version

SublimeText3 Mac version

God-level code editing software (SublimeText3)

How to use char array in C language How to use char array in C language Apr 03, 2025 pm 03:24 PM

The char array stores character sequences in C language and is declared as char array_name[size]. The access element is passed through the subscript operator, and the element ends with the null terminator '\0', which represents the end point of the string. The C language provides a variety of string manipulation functions, such as strlen(), strcpy(), strcat() and strcmp().

Avoid errors caused by default in C switch statements Avoid errors caused by default in C switch statements Apr 03, 2025 pm 03:45 PM

A strategy to avoid errors caused by default in C switch statements: use enums instead of constants, limiting the value of the case statement to a valid member of the enum. Use fallthrough in the last case statement to let the program continue to execute the following code. For switch statements without fallthrough, always add a default statement for error handling or provide default behavior.

How to inverse the result of !x in C? How to inverse the result of !x in C? Apr 03, 2025 pm 01:57 PM

In C language, you can use !!x, but it only uses two Boolean conversions, and it is more concise and efficient to use x directly.

What is the function of C language sum? What is the function of C language sum? Apr 03, 2025 pm 02:21 PM

There is no built-in sum function in C language, so it needs to be written by yourself. Sum can be achieved by traversing the array and accumulating elements: Loop version: Sum is calculated using for loop and array length. Pointer version: Use pointers to point to array elements, and efficient summing is achieved through self-increment pointers. Dynamically allocate array version: Dynamically allocate arrays and manage memory yourself, ensuring that allocated memory is freed to prevent memory leaks.

The importance of default in switch case statement (C language) The importance of default in switch case statement (C language) Apr 03, 2025 pm 03:57 PM

The default statement is crucial in the switch case statement because it provides a default processing path that ensures that a block of code is executed when the variable value does not match any case statement. This prevents unexpected behavior or errors and enhances the robustness of the code.

What is the priority of C language !x? What is the priority of C language !x? Apr 03, 2025 pm 02:06 PM

The logical non-operator (!) has the priority next to parentheses, which means that in expressions, it will precede most other operators. Understanding priority not only requires rote memorization, but more importantly, understanding the logic and potential pitfalls behind it to avoid undetectable errors in complex expressions. Adding brackets can clarify expression intent, improve code clarity and maintainability, and prevent unexpected behavior.

How to understand !x in C? How to understand !x in C? Apr 03, 2025 pm 02:33 PM

!x Understanding !x is a logical non-operator in C language. It booleans the value of x, that is, true changes to false, false changes to true. But be aware that truth and falsehood in C are represented by numerical values ​​rather than boolean types, non-zero is regarded as true, and only 0 is regarded as false. Therefore, !x deals with negative numbers the same as positive numbers and is considered true.

What is the impact of the static keyword on the scope of C user identifiers? What is the impact of the static keyword on the scope of C user identifiers? Apr 03, 2025 pm 12:09 PM

The static keyword affects the scope and life cycle of the identifier: Global variable: Limited to the source file, only visible in the current file, avoiding naming conflicts. Function: Limited to the source file, it is only visible in the current file, hiding implementation details and improving encapsulation. Local variables: The life cycle is extended to the entire program, retaining values ​​between function calls, and can be used to record states, but pay attention to memory management risks.

See all articles