Artificial Intelligence Enabled Mutual Funds To Drive Enhanced Future Planning
Financial Technology (FinTech) is revolutionizing the future of Investment and Financial Planning. Covid pandemic has shaken the roots of businesses as well as the world economy, striking new vibes for modernization through enhancements in Artificial Intelligence and Machine Learning to automate tasks. Automation of tasks help to continue forth sustained growth in the economy by regularizing events with AI leading to ease and accurate real-time results attained.
A comprehensive Financial Planning is an utmost importance for an individual while evaluating the financial position, analysing and preparing budgets, planning contingencies and estimating financial goals to be achieved.
Such a planning requires hectic or even costly involvement to proper financial advices. As Artificial Intelligence is easing out business tasks, it is effectively capable in providing accurate advices for financial planning. Accuracy in market trend detection enables such effcient forecasting without even indulging into the depth of having a complete financial awareness. As noted by Utpal Sarma, Head of Business Analytics, Tata Asset Management,
AI and ML add new dimension to fund management. They enable machines to mimic human judgement to a certain extent, while retaining the benefits of disciplined rule-based investing. Investment strategies employing such constructs tend to leverage market opportunities better while avoiding bias errors.
AI In Mutual Fund Investing
Portfolio management and Advisory are the major components of investing which require ample resources for better understanding of the market trends accurately enabling a successful forecast. With the advent of Machine Learning and Artificial Intelligence, automation of tasks reputed forth as per the investor's interest and financial requirements.
There are already plenty of funds managed by AI algorithm in US and Europe, however, India is stepping forward into the path with the latest introduction of TATA QUANT FUND.
Such Automated Finance not only eases out various tasks of portfolio management, however also, smoothens investor related registration processes, availability of 24/7 service facility, better market trend predictions, and financial assists in terms of better advisory services to investors as per their requirements excluded of any bias. As stated by Mr. Utpal Sharma, the Head of Business Analytics at Tata Asset Management,
It's very hard to pinpoint how human biases impacted what performances by quantum. That's not something that we measured. We definitely think if you do it in a systematic manner where you are eliminating judgements which are not completely objectively, which are not non-deterministic.
Tata Quant Fund is a new AI-driven open-ended mutual fund
Tata has launched its new AI driven open ended mutual fund scheme known as Tata Quant Fund, as on 22 Jan, 2020. The investment objective of the scheme is to seek medium to long-term capital appreciation by investing in equity and equity related securities that are selected based on a quantitative model.
Quant Funds are predominantly based on the quantitative analysis of stock picking decided on a predefined set of rules. As per the planned strategy made by the fund house, it modifies the stock portfolio holdings through automated entry or exit. Explained throughly by Mr. Sharma of Tata Asset Management, about the new Tata Quant Fund,
We got two models. One which chooses the best portfolio to invest in, in the coming period. Another model which predicts whether the absolute direction is positive or negative. When we combine them, we have the ability to participate in uptrending markets while avoiding markets which are headed downwards.
Using the machine learning models and through active predictive analysis of the upcoming market trends as per trader's motive, Tata's new mutual fund has convexed the complex unpredictability to a more advanced and structured calls. Based on the latest policy changes and other declarations made in the budgets, garnered through the past 22 years of market data, machine learning predicts the future trends thereby enabling a better fund portfolio management.
Upside AI Portfolio Management Service (PMS)
An investor and a portfolio manager entering into such a service facility (PMS), goes with a specific investment strategy, tailoring the portfolio as per the requirements of the investor. It involves active participation of the fund manager in choosing certain stocks which would diversify the portfolio confering with the needs of the investor.
Upside AI Portfolio Management Service at the latest, was approved on February, 2018 by SEBI, though was incorporated in December, 2017. Upside AI uses Machine Learning & AI to make better investing decisions than humans over the long term of investments. Based on the core Fundamental Analysis of stocks and market, it automates the best investment portfoio for the investors of more than 50 lakhs, as of now, and is looking forward onto further expansion by allowing less than 50 lakhs.
We started Upside AI with the belief that technology should be at the core when it comes to making fundamental investment decisions. This is because we believe technology will make better decisions than humans over the long term since machines are unbiased and unemotional decision-makers.
- As per Kanika Agarrwal, Co-founder of Upside AI.
Upside AI utilizes the computing power of the latest generation in suggesting a portfolio of stocks based on its analysis. The feed data provided by the investors as in: profit and loss statement, balance sheet, and cash flow statement, the machine learning algorithm trains itself to analyze the best investment stocks with either the strong fundamentals or with greater demand in market.
Autonomous balancing of the portfolio every quater as per the updated financial reports published by the listed companies, Upside AI ensures best strategy to be followed for the clients.