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.

Although the average consumer may not be familiar with the concept of machine learning, it's already a big part of our daily lives. Tom Schlebusch, the co-founder and chief executive of NMRQL Research, a local fintech player offering South Africa's first machine-learning-powered unit trust fund, says machine learning has a big role to play in how we invest our money. Amid the explosion of data and the exponential advancement of technology, investors are beginning to realise the benefits of machine learning in investment management. Schlebusch says that, when Amazon or Netflix makes recommendations that appeal to us, it's because machine learning was used to analyse our behaviour. "All social media platforms use machine learning to provide personalised feedback based on behaviour patterns and relationships with other users.