New investment fund completely controlled by AI will soon go live

21 Mar 2017

Image: AH86/Shutterstock

A new investment fund to be launched in Germany will be completely controlled by artificial intelligence with the aim of surpassing humans in their ability to spot serious returns on investments.

Artificial intelligence (AI) and machine learning is already defining multiple aspects of our lives, from consumer tech to healthcare, and now it is expected to completely change the way finance has been run for decades.

One such development appears to be underway in Germany, where two investment firms – BayernInvest and Acatis Investments – are joining forces to launch a new global equity fund that will be the first to be 100pc controlled by AI.

According to Citywire, the new fund will be called BayernInvest Acatis Ki Aktien Global Fonds and will be launched on 23 March, from when it will work for a select group of seed investors.

Acatis has been particularly active within the field of AI research for finance. The company has already undertaken something called the Quantenstein project, which used artificial intelligence to suggest stock investments for one of its global trading funds.

To help decide what companies to invest in, the new AI will be based on a computer-led stock selection process and will invest in 50 different stocks and rebalances on a semi-annual basis.

Unlike existing machine learning techniques used by traders, the developers claim that this new AI can discern between non-linear developments.

Both BayernInvest and Acatis will hope that the AI fund will eventually outperform the MSCI World Index by around 3pc on an annual basis.

‘This computer is vastly superior to me’

This might be quite achievable as, already, an experimental version was found to outperform the market by as much as 5pc over a five-year period.

“We are releasing the computer into the wilderness,” said Hendrik Leber, Acatis’ founder and owner, speaking with “I readily admit, this computer is vastly superior to me.”

He added that he is only aware of some of what the AI is doing, but otherwise it will be left to its own devices to figure out the best way of making returns.

Just two years ago, a Hong Kong venture-capital investment company made quite a stir after it appointed an AI program to its board of directors.

Colm Gorey was a senior journalist with Silicon Republic