Aberdeen Standard Investments is the latest to launch AI fund
Aberdeen Standard Investment is the latest company to introduce Artificial Intelligence (AI) technology to help run funds.
The Aberdeen Global Artificial Intelligence Global Equity SICSV will use machine learning to identify sources of potential returns.
Global Head of Quantitative Solutions David Wickham said: "Recent innovations in AI, combined with rapid advances in computational power, have enabled us to harness machine learning techniques to dynamically time factor premia.
"This is an innovative AI-powered approach to factor timing that allows us to time the relevant individual metrics used within those factors.
"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."
Asian-based Asset Management One International has also recently launched its AI Deep Learning Global Equity fund which uses an algorithm designed to mimic a human brain.
In June Black Rock launched six funds that use machine learning to systematically pick stocks.
AJ Bell head of active portfolios Ryan Hughes said AI is a logical next steps for fund groups .
"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 said.
"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 Hargreaves Lansdown senior analyst Laith Khalaf said the technology may not be advanced enough yet to extend to funds.
He said: "I'm not sure we are at the stage where you can simply set an algorithm and leave it to run.
"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."