The days of humans managing investment funds may be numbered as they are replaced by cheaper and more efficient technology.
Leda Braga, who runs the US$8.9 billion BlueTrend hedge fund, one of the world’s leading computer-driven hedge funds, was quoted in a Financial Times report as saying traditional investment approaches might soon struggle to keep ahead of algorithm-based trading models.
“Right now there is a place for both approaches,” she said. “That is the present. But then we have the future. Does the future hold a world where the systematic approach dominates? I suspect yes.”
Many traditional fund managers have struggled to make money for clients in the past year, while computer-driven hedge funds outpaced most of their human rivals, the report said.
While human fund managers are able to interpret market psychology in a way computer-driven systems cannot, Braga said the human mind would never be able to keep track of the quantity of information that systematic funds can.
“In the case of our equities fund, we trade 4,500 stocks. As a human being, it would be very difficult to keep track of and control risks across that number of stocks,” she said.
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