Вештачка интелигенција

Artificial Intelligence: Transforming Investment Management

Summary

Artificial Intelligence (AI) is revolutionizing the world of investment management, with half of systematic investors already incorporating AI into their investment processes. A majority of these investors (75%) expect AI to equal or surpass traditional investment analysis within the next […]

Artificial Intelligence: Transforming Investment Management

Artificial Intelligence (AI) is revolutionizing the world of investment management, with half of systematic investors already incorporating AI into their investment processes. A majority of these investors (75%) expect AI to equal or surpass traditional investment analysis within the next decade. This insight comes from a recent report that highlights the widespread expectation of AI tools transforming portfolio management in the years to come.

AI is Already in Use
Systematic investors are actively utilizing AI for various purposes. For instance, survey respondents reported using AI to gain a better understanding of the market environment and identify macroeconomic shifts. About 46% use AI for pattern recognition in market behavior, while 38% employ it for portfolio allocation and risk management. Investors appreciate AI’s ability to minimize human bias and predict the unexpected. There is a significant expectation of increased AI usage in the future. While a minority (29%) already use AI for developing and testing investment strategies, the majority (76%) anticipates doing so in the future. Moreover, while 20% currently employ AI for real-time monitoring and adjustment of investment positions, over half (55%) expects to do so in the future.

Investors Recognize Enhanced Risk Management as the Core Advantage
Investors have identified improved risk management (cited by 76% of respondents) as the primary advantage of AI. They also value AI’s capability to adapt to changing market conditions (65%). However, challenges remain. Respondents mentioned the high implementation costs (64%) and the complexity and interpretability of AI models (61%) as the main obstacles to AI adoption.

“AI-driven strategies in portfolios certainly present a new opportunity when utilized correctly,” said Mo Haghbin, Head of Solution at Invesco. “Companies must adapt quickly to harness this technology, given the growing interest in AI-driven models in the future, particularly among younger investors.”

Different Perspectives of Institutional Investors
On the other hand, institutional investors view accurate and timely insights (78%) as the most appealing aspect of AI, followed by improved risk management (74%) and enhanced efficiency and automation (68%). Their main concerns are complexity (78%) and the quality and completeness of data (51%).

“Stakeholder management and providing transparency are key challenges for institutional investors,” added Mr. Haghbin. “Investors need to be prepared to clearly explain how AI models are used in portfolios to justify their adoption and added value.”

The Growing Importance of Natural Language Processing (NLP) Tools
Investors have embraced natural language processing (NLP) tools, employing them in various operations such as summarizing and translating notes, transforming recommendations into understandable language for sales teams, and tailoring communication tones for different client groups. NLP models have also found applications in the investment process. 41% of respondents use NLP for sentiment analysis, and about three-quarters (73%) expect to do so in the future. Some investors reported scouring social media channels to uncover existing market narratives about companies, measuring the frequency of mentions and context, providing valuable insights for risk assessment and short-term trading decisions.

APAC and North America Take the Lead
However, Invesco’s research unveils significant regional differences in attitudes toward AI and NLP. Investors in the EMEA region are more skeptical compared to their counterparts in APAC and North America. The majority of EMEA investors (51%) believe that AI will remain less important than traditional analysis methods in ten years, compared to only 10% in North America and 7% in APAC. Conversely, only 4% of EMEA investors think that AI will replace traditional analysis methods in this timeframe, whereas higher numbers were observed in North America (19%) and APAC (20%).

Furthermore, investors in North America and APAC currently employ AI much more frequently in their investment processes. Investors in the APAC region use AI for pattern recognition in market behavior twice as often as those in the EMEA region, and over three times as often for real-time adjustments of investment positions. EMEA investors lag behind their counterparts in North America and APAC in every segment of AI adoption.

The Rise of Systematic Tools Assisting Investors in Taming Markets
While factor investing has historically been the foundation of systematic investment, Invesco’s research reveals a wider range of systematic strategies that have helped investors tackle key challenges in recent years. Tools for understanding the macroeconomic environment have become particularly important, and the ability of systematic approaches to assist in managing market volatility was a focal point of this year’s research. The majority of investors (63%) agreed that systematic strategies helped manage market volatility over the past year. Additionally, nearly 60% of respondents stated that the new market regime with higher inflation has supported a systematic approach, with only 6% of institutional investors and 10% of wholesale investors disagreeing. For three-quarters of respondents, dynamic asset allocation has become a fundamental component of their approach, enabling them to balance and adapt their portfolios according to the market environment. Systematic tools have facilitated the identification and description of macroeconomic regimes, aiding investors in drawing conclusions about their impact.

FAQ:

1. What is AI?
AI stands for Artificial Intelligence, which refers to the development of computer systems capable of performing tasks that would normally require human intelligence, such as pattern recognition, decision-making, and problem-solving.

2. How are investors using AI?
Investors are using AI for various purposes, including understanding market behavior, portfolio allocation, risk management, sentiment analysis, and real-time adjustments of investment positions.

Sources:
– Invesco Research: [URL domain: invesco.com]