Machine learning still in early stages within asset management – report

Although the money management industry is one in which the nascent machine learning field has not yet seen great success, early evidence suggests that machine learning tools could serve portfolio managers well within asset management, according to a report from AQR Capital Management. The report, "Can Machines'Learn' Finance?" suggests that financial machine learning could be "the next leap forward in quantitative investing." The report raises two points essential for understanding machine learning's current state within the asset management industry. The first is that research in the field is in very early days. The second is that early research suggests potential economically and statistically significant improvements in the performance of portfolios that leverage machine learning tools. "However, the gains are evolutionary, not revolutionary," the report says.