Date
19 October 2018
Studies show AI-driven automatic trading could generate better returns than humans. Photo: Reuters
Studies show AI-driven automatic trading could generate better returns than humans. Photo: Reuters

Will AI replace fund managers?

There has been chatter that Ping An Insurance (02318.HK), one of China’s leading insurance groups, is shutting down an asset management unit and switching to passive investment management using artificial intelligence (AI).

“It will only leave three positions among the total of 30 strong investment managers and researchers. The rest have been given two months to find a new job,” someone from the company reportedly said, according to a widely circulated social media post.

Ping An Insurance currently has nearly 3 trillion yuan of assets under management.

A company spokesman has clarified that “asset management is one of Ping An’s core business areas and it is a general rule that we will always look to develop the business in a sustainable and healthy way.”

The asset management unit is just one of the group’s several investment platforms. It is normal practice to make internal adjustments in order to keep up with changing market environment, the spokesman added.

“The group is mulling over a reform. The big direction is to lean towards smart investment advisory and quantitative investment,” another company executive told the China Securities Journal, adding that Ping An recently hired new two senior managers to oversee tech and quantitative investment.

We can’t say for sure whether an asset management platform of Ping An is indeed switching to AI, but it does reflect a growing trend.

Several studies have suggested that AI-driven automatic trading could generate better returns than humans. The trading algorithms can minimize mistakes caused by human emotions, as well as help lead to huge savings in terms of labor costs.

The full article appeared in the Hong Kong Economic Journal on Sept 21

Translation by Julie Zhu

[Chinese version 中文版]

– Contact us at [email protected]

RC

Hong Kong Economic Journal columnist

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