Aberdeen Standard Investments Launches AI Fund

Aberdeen Standard Investment is the most recent company to introduce Artificial Intelligence (AI) technology to help in running funds.

The Aberdeen Global Artificial Intelligence Global Equity SICSV is set to use machine learning in order to identify the sources of potential returns.

David Wickham, the Global Head of Quantitative Solutions, stated: “Recent innovations in AI, combined with rapid advances in computational power, have enabled us to harness machine learning techniques to dynamically time factor premia.”

He added: “This is an innovative AI-powered approach to factor timing that allows us to time the relevant individual metrics used within those factors.”

He concluded: “We can now bias our portfolio towards the factors best suited to today’s market environment and continue to evolve the factor exposures as the market changes through time.”

AI Deep Learning Global Equity fund has also been launched by Asset Management One International. The fund is based in Asia and it makes use of an algorithm that is designed to mimic a human brain.

Last June, Black Rock was able to launch six funds that make use of machine learning to systematically choose stocks.

Ryan Hughes, the head of active portfolios at AJ Bell, said that artificial intelligence is considered as a logical next step for fund groups.

He stated: “The difference with AI is that the computer is in theory learning as it goes and hence able to adapt to the market it is investing in, potentially making the investment process more efficient.”

He added: “In a way, AI is, therefore, a natural extension of what fund managers have been doing for years and so we’d expect the use of AI in fund management to continue to grow as models are refined and confidence grows that they can deliver on their potential.”

However, Laith Khalaf, a senior analyst at Hargreaves Lansdown, said that the technology may not yet be considered be advanced enough in order to extend to funds.

He stated: “I’m not sure we are at the stage where you can simply set an algorithm and leave it to run.

He added: “I think the risk is if you have trading based on rules it may be that the world changes and those rules don’t really apply anymore.”