When AI fund managers outperform 93% of human counterparts in a 30-year backtest, what is the future for traditional fund managers? Stanford Business School's accounting professor Ed deHaan's assertion has sent shockwaves through the financial world: “In five years, positions that involve sitting around and working on Excel sheets will no longer exist.” This statement undoubtedly rings alarm bells for every financial professional. Today, Vantage will take you on a deep dive into how VPS, through AI investment, is set to completely overthrow the status of traditional fund managers.
Stanford's Terminator: The Rise of AI Fund Managers
Imagine deploying a Terminator-style AI fund manager from the future on Wall Street in 1990. Stanford University and Boston College researchers conducted this very experiment. Their “random forest” model outperformed 93% of human fund managers from 1990 to 2020, generating an average of $17.1 million in excess returns per quarter. Professor deHaan points out that AI doesn't profit by uncovering obscure information missed by humans but by deeply analyzing public data to unearth information hidden in plain sight. This means AI can complete in hours what traditional analysts would take days or even weeks to accomplish.
Surrender of the Quant Giants: From Skepticism to Submission
If Stanford's experiment is academic, then AQR's transformation is an industry bellwether. As a quant investment giant managing $136 billion in assets, AQR's co-founder Cliff Asness admits, “We have increasingly yielded to machines.” This shift wasn't made lightly. AQR had long adhered to human-designed, highly interpretable rule-driven models. However, after the “quant winter” from 2018 to 2020, AQR began fully embracing AI technology, using machine learning to dynamically adjust the weights of factors in their investment portfolios. This transformation has improved fund performance but also introduced new challenges, especially in explaining AI's decision logic to investors during market downturns.
VPS: The Future of AI Investment
Amid the wave of AI investment, VPS is leading the charge in its unique way. By integrating cutting-edge AI technology, VPS not only provides real-time market analysis and investment advice but also tailors investment strategies to meet users' personalized needs. This deeply personalized service makes VPS every investor's “AI Chief Investment Officer.” In this era of AI ascendancy, the role of traditional fund managers is being redefined. Those who can understand AI, utilize AI, and surpass AI will become scarce resources in the market.
Revolutionary Impact of AI Investment
The rise of AI is not just a technological breakthrough but a disruption of traditional investment philosophies. Traditionally, successful fund managers relied on creative thinking and extensive networks to discover investment opportunities beyond financial statements. However, AI, through its analysis and processing of vast amounts of data, can quickly identify hidden market patterns and investment opportunities. VPS, through AI technology, can accomplish in hours what traditional analysts would take days or even weeks to complete. This efficiency dominance is making AI increasingly prevalent in the investment field.
Future Prospects of AI Investment
Despite AI's formidable capabilities in the investment sector, it faces challenges. The “black box” issue, where AI's decision-making process is often opaque, poses a significant challenge, especially during market downturns when explaining AI's logic to investors becomes difficult. Additionally, as more institutions adopt AI technology, market efficiency continues to improve, making excess returns more elusive. However, through its unique AI technology and personalized services, VPS is at the forefront of transforming the investment industry.
Summary: AI is profoundly changing the rules of the investment game. Through AI investment, VPS is overthrowing the status of traditional fund managers, offering investors more efficient and precise services. In this era of AI ascendancy, every investment professional faces a choice: to become an Excel operator replaced by AI or to become a new type of investment expert who harnesses AI?
