Business News Tech AI AI-powered stock funds bet bots can pick stocks faster and better than humans

AI-powered stock funds bet bots can pick stocks faster and better than humans

A select group of fund managers is now incorporating artificial intelligence into their exchange traded funds to guide investment choices. Surveys reveal considerable enthusiasm among asset managers for adopting AI technologies this year. Notably, some AI-powered funds have outperformed traditional benchmarks swiftly. Although apprehensions about risk management in volatile markets persist, many advisors are exercising caution.

A handful of fund managers are betting that exchange traded funds run by AI stock-picking models can crunch data quicker and make better investment decisions than humans, even as many people remain wary or even fearful of artificial intelligence. So far, fewer than half-a-dozen ETFs, collectively managing only about $30 million of the ETF industry's nearly $17 trillion in assets, rely solely on AI-powered bots to control everything from research to stock selection . While that represents a tiny fraction of the industry, AI is making its way slowly and steadily into the investment processes of most asset managers, to some extent, even if that may not yet be visible to investors themselves. Earlier this year, 91% of asset managers surveyed by Mercer reported plans to increase their use of AI-based portfolio management tools this year and said they are trying to figure out what tasks can be safely handed off to AI.

The performance of the handful of funds that rely solely on AI to generate returns shows they are beating the market, even if their track records stretch back only a few months.

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