AI is killing the 'black box' quant fund, BlackRock's Chantal Giles says
If a quant manager can't explain why a stock is in a portfolio, they're not using AI properly, according to an executive from the world's largest asset manager.
Quantitative investing has over the years gained a reputation as a mysterious corner of finance, with the technical workings of how mathematical models and algorithms are used to identify investments not easily explained to those not versed in its intricacies.
But thanks to AI, quant investing is no longer the "black box" it once was, according to BlackRock’s head of wealth for Australasia, Chantal Giles.
“This concept of the 'black box' of quant investing is dead. We can actually identify a stock in the portfolio and tell you all the reasons why it's in that. Instead of saying the process told us that,” Giles told the Lonsec Symposium in Sydney this week.
Giles said Blackrock uses AI to identify investments for portfolios and that the asset manager had evolved its use of the technology to what they call augmentation investment management.
