SA's first investment manager powered by machine learning -- plans to launch factor-based funds that it hopes will be easier for investors to understand. The Michael Jordaan-backed fintech uses artificial intelligence (AI) and machine learning to drive research, analysis and stock selection, offering a hedge fund and unit trust fund. Jordaan, the former CEO of First National Bank, has invested his retirement savings in the NMRQL unit trust. "It is important to demonstrate to outside investors that I have proper skin in the game," he told Business Day. But the sophistication of NMRQL's technology, which removes the human element in investment decision-making almost entirely, has proved a hurdle to sales.

In October last year, fintech company NMRQL launched its first unit trust in South Africa. The NMRQL SCI Balanced Fund is the first local unit trust to exclusively use machine learning for managing its portfolio. Using computers in investment management is certainly not a new idea, as there are already a number of funds run using quantitative models and many active managers use these systems in their decision making. This is however the first fund giving South African investors the chance to see if machines on their own can make better investment decisions than humans. Proponents of artificial intelligence argue that this won't be much of a contest, given what has already been achieved.