Reinforcement Learning (RL) has shown significant promise in automated portfolio management; however, effectively balancing risk and return remains a central challenge, as many models fail to adapt to dynamically changing market conditions. We propose Meta-controlled Agents for a Risk-aware System (MARS), a novel framework addressing this through a multi-agent, risk-aware approach. MARS replaces monolithic models with a Heterogeneous Agent Ensemble, where each agent's unique risk profile is enforced by a Safety-Critic network to span behaviors from capital preservation to aggressive growth. A high-level Meta-Adaptive Controller (MAC) dynamically orchestrates this ensemble, shifting reliance between conservative and aggressive agents to minimize drawdown during downturns while seizing opportunities in bull markets. This two-tiered structure leverages behavioral diversity rather than explicit feature engineering to ensure a disciplined portfolio robust across market regimes. Experiments on major international indexes confirm that our framework significantly reduces maximum drawdown and volatility while maintaining competitive returns.

The Trump administration's pressure on European regulators is having an impact, with fewer restrictions on Big Tech and canceled measures. Almost everything is on hiatus. The EU AI Act, Digital Services Act, and Digital Markets Act are all at risk. The European Commission is preparing to end the year with virtually no movement on its most important tech policy initiatives. Many measures may even be reversed.

Robust yield curve estimation is crucial in fixed-income markets for accurate instrument pricing, effective risk management, and informed trading strategies. Traditional approaches, including the bootstrapping method and parametric Nelson-Siegel models, often struggle with overfitting or instability issues, especially when underlying bonds are sparse, bond prices are volatile, or contain hard-to-remove noise. In this paper, we propose a neural networkbased framework for robust yield curve estimation tailored to small mortgage bond markets. Our model estimates the yield curve independently for each day and introduces a new loss function to enforce smoothness and stability, addressing challenges associated with limited and noisy data. Empirical results on Swedish mortgage bonds demonstrate that our approach delivers more robust and stable yield curve estimates compared to existing methods such as Nelson-Siegel-Svensson (NSS) and Kernel-Ridge (KR). Furthermore, the framework allows for the integration of domain-specific constraints, such as alignment with risk-free benchmarks, enabling practitioners to balance the trade-off between smoothness and accuracy according to their needs.

Traditional stochastic control methods in finance struggle in real world markets due to their reliance on simplifying assumptions and stylized frameworks. Such methods typically perform well in specific, well defined environments but yield suboptimal results in changed, non stationary ones. We introduce FinFlowRL, a novel framework for financial optimal stochastic control. The framework pretrains an adaptive meta policy learning from multiple expert strategies, then finetunes through reinforcement learning in the noise space to optimize the generative process. By employing action chunking generating action sequences rather than single decisions, it addresses the non Markovian nature of markets. FinFlowRL consistently outperforms individually optimized experts across diverse market conditions.

We propose DeepAries , a novel deep reinforcement learning framework for dynamic portfolio management that jointly optimizes the timing and allocation of rebalancing decisions. Unlike prior reinforcement learning methods that employ fixed rebalancing intervals regardless of market conditions, DeepAries adaptively selects optimal rebalancing intervals along with portfolio weights to reduce unnecessary transaction costs and maximize risk-adjusted returns. Our framework integrates a Transformer-based state encoder, which effectively captures complex long-term market dependencies, with Proximal Policy Optimization (PPO) to generate simultaneous discrete (rebalancing intervals) and continuous (asset allocations) actions. Extensive experiments on multiple real-world financial markets demonstrate that DeepAries significantly outperforms traditional fixed-frequency and full-rebalancing strategies in terms of risk-adjusted returns, transaction costs, and drawdowns. Additionally, we provide a live demo of DeepAries at https://deep-aries.github.io/, along with the source code and dataset at https://github.com/dmis-lab/DeepAries, illustrating DeepAries' capability to produce interpretable rebalancing and allocation decisions aligned with shifting market regimes. Overall, DeepAries introduces an innovative paradigm for adaptive and practical portfolio management by integrating both timing and allocation into a unified decision-making process.

Large Language Models (LLMs) have demonstrated notable capabilities across financial tasks, including financial report summarization, earnings call transcript analysis, and asset classification. However, their real-world effectiveness in managing complex fund investment remains inadequately assessed. A fundamental limitation of existing benchmarks for evaluating LLM-driven trading strategies is their reliance on historical back-testing, inadvertently enabling LLMs to "time travel"-leveraging future information embedded in their training corpora, thus resulting in possible information leakage and overly optimistic performance estimates. To address this issue, we introduce DeepFund, a live fund benchmark tool designed to rigorously evaluate LLM in real-time market conditions. Utilizing a multi-agent architecture, DeepFund connects directly with real-time stock market data-specifically data published after each model pretraining cutoff-to ensure fair and leakage-free evaluations. Empirical tests on nine flagship LLMs from leading global institutions across multiple investment dimensions-including ticker-level analysis, investment decision-making, portfolio management, and risk control-reveal significant practical challenges. Notably, even cutting-edge models such as DeepSeek-V3 and Claude-3.7-Sonnet incur net trading losses within DeepFund real-time evaluation environment, underscoring the present limitations of LLMs for active fund management. Our code is available at https://github.com/HKUSTDial/DeepFund.

Accurate prediction of financial market volatility is critical for risk management, derivatives pricing, and investment strategy. In this study, we propose a multitude of regime-switching methods to improve the prediction of S&P 500 volatility by capturing structural changes in the market across time. We use eleven years of SPX data, from May 1st, 2014 to May 27th, 2025, to compute daily realized volatility (RV) from 5-minute intraday log returns, adjusted for irregular trading days. To enhance forecast accuracy, we engineered features to capture both historical dynamics and forward-looking market sentiment across regimes. The regime-switching methods include a soft Markov switching algorithm to estimate soft-regime probabilities, a distributional spectral clustering method that uses XGBoost to assign clusters at prediction time, and a coefficient-based soft regime algorithm that extracts HAR coefficients from time segments segmented through the Mood test and clusters through Bayesian GMM for soft regime weights, using XGBoost to predict regime probabilities. Models were evaluated across three time periods--before, during, and after the COVID-19 pandemic. The coefficient-based clustering algorithm outperformed all other models, including the baseline autoregressive model, during all time periods. Additionally, each model was evaluated on its recursive forecasting performance for 5- and 10-day horizons during each time period. The findings of this study demonstrate the value of regime-aware modeling frameworks and soft clustering approaches in improving volatility forecasting, especially during periods of heightened uncertainty and structural change.

In electricity markets around the world, the ability to anticipate price movements with precision can be the difference between profit and loss, especially for fast-acting assets like battery energy storage systems (BESS). As grid volatility increases due to renewables and market decentralisation, operators and forecasters alike face growing pressure to transform prediction into strategy. Yet while forecast data is abundant, especially in advanced markets like Australia's National Electricity Market (NEM), its practical value in driving real-world BESS trading decisions remains largely unexplored. This thesis dives into that gap. This work addresses a key research question: Can the accuracy of the Australian Energy Market Operator (AEMO) energy price forecasts be systematically leveraged to develop a reliable and profitable battery energy storage system trading algorithm? Despite the availability of AEMO price forecasts, no existing framework evaluates their reliability or incorporates them into practical BESS trading strategies. By analysing patterns in forecast accuracy based on time of day, forecast horizon, and regional variations, this project creates a novel, forecast-informed BESS trading model to optimise arbitrage financial returns. The performance of this forecast-driven algorithm is benchmarked against a basic trading algorithm with no knowledge of forecast data. The study further explores the potential of machine learning techniques to predict future energy prices by enhancing AEMO forecasts to govern a more advanced trading strategy. The research outcomes will inform future improvements in energy market trading models and promote more efficient BESS integration into market operations.

In this paper, our objective is to develop a multi-agent financial system that incorporates simulated trading, a technique extensively utilized by financial professionals. While current LLM-based agent models demonstrate competitive performance, they still exhibit significant deviations from real-world fund companies. A critical distinction lies in the agents' reliance on ``post-reflection'', particularly in response to adverse outcomes, but lack a distinctly human capability: long-term prediction of future trends. Therefore, we introduce QuantAgents, a multi-agent system integrating simulated trading, to comprehensively evaluate various investment strategies and market scenarios without assuming actual risks. Specifically, QuantAgents comprises four agents: a simulated trading analyst, a risk control analyst, a market news analyst, and a manager, who collaborate through several meetings. Moreover, our system incentivizes agents to receive feedback on two fronts: performance in real-world markets and predictive accuracy in simulated trading. Extensive experiments demonstrate that our framework excels across all metrics, yielding an overall return of nearly 300% over the three years (https://quantagents.github.io/).

The rapid advancement of LLMs sparked significant interest in their potential to augment or automate managerial functions. One of the most recent trends in AI benchmarking is performance of Large Language Models (LLMs) over longer time horizons. While LLMs excel at tasks involving natural language and pattern recognition, their capabilities in multi-step, strategic business decision-making remain largely unexplored. Few studies demonstrated how results can be different from benchmarks in short-term tasks, as Vending-Bench revealed. Meanwhile, there is a shortage of alternative benchmarks for long-term coherence. This research analyses a novel benchmark using a business game for the decision making in business. The research contributes to the recent literature on AI by proposing a reproducible, open-access management simulator to the research community for LLM benchmarking. This novel framework is used for evaluating the performance of five leading LLMs available in free online interface: Gemini, ChatGPT, Meta AI, Mistral AI, and Grok. LLM makes decisions for a simulated retail company. A dynamic, month-by-month management simulation provides transparently in spreadsheet model as experimental environment. In each of twelve months, the LLMs are provided with a structured prompt containing a full business report from the previous period and are tasked with making key strategic decisions: pricing, order size, marketing budget, hiring, dismissal, loans, training expense, R&D expense, sales forecast, income forecast The methodology is designed to compare the LLMs on quantitative metrics: profit, revenue, and market share, and other KPIs. LLM decisions are analyzed in their strategic coherence, adaptability to market changes, and the rationale provided for their decisions. This approach allows to move beyond simple performance metrics for assessment of the long-term decision-making.