Rise of the algorithms - Business News The Star Online

THE ASSET management industry in this part of the world is ripe for a disruption with the advent of quantitative-styled investing methods. Quantitative or quant funds employ artificial intelligence (AI) through specialised computer software or algorithms that study patterns and asset prices to use this information to execute trading strategies. Such softwares reduce or totally eliminate the need for human intervention in the investing or trading process that is present in the traditional human discretional approach through fund managers and brokers. "There are hardly any quant funds in the region now. Traditionally, people want a track record of investing. "As most quant funds are new, they are usually assessed on their back-tested results," AmInvest's chief executive officer (CEO) Datin Maznah Mahbob tells StarBizWeek. The emergence of such funds as an alternative to the active or discretional approach will further add to competition and pressure fund management fees downwards. "Fund management fees for active funds have been under pressure for the past ten years, as most have struggled to outperform index funds and exchange traded funds, which are cheaper alternatives.