Artificial Intelligence (AI) is increasingly being used in asset management, with potential applications in alpha generation, portfolio construction and execution. CFM, a global quantitative and systematic asset management firm, sees AI as a tool to improve risk management and generate new investment ideas and sources of alpha. AI is not a magic wand, but rather a statistical tool that needs to be implemented scientifically and collaboratively. Institutional investors need to look beyond the hype and understand AI’s place in the asset-management ecosystem.
