Displaying items by tag: ai

Dear FINSUM readers, we want to gauge your interest in a potential new ETF coming to market in 2021. As many of you will know, thematic tech ETFs have had some of the best returns over the last half decade, and there is a new ETF in the works that appears like it might have found another niche for excellent growth.

The M2M (symbol: MTOM), or machine-to-machine, economy is one where the smart, autonomous, networked and economic independent machines or devices act as the participants, carrying on the necessary activities of production, distribution, and allocation with little to no human intervention. It is often referred to as the fourth stage of the industrial revolution. M2M transforms traditional industries into technology industries. The enabling technologies include five G, cloud computing, artificial intelligence, edge computing, big data, blockchain, quantum computing and, of course, the internet of things.

Please tell us what you think of MTOM in the form of a 30-second survey (2 multiple choice questions).

(New York)

One of the big problems in our growing era of algorithmic trading is herd behavior. For instance, when many trading algorithms are all geared to trade on the basis of momentum, then you tend to get a ton of it at the same time. Well, the problem might be set to get worse as UBS is debuting a new product to help active managers with trade selection using AI. UBS is launching an AI-based product which recommends trade ideas to active managers, something being referred to as the Netflix of asset management. In other words, UBS’ AI recommends a trading strategy which it thinks will suit the manager.

FINSUM: So now even active managers are trying to be enticed into using AI-recommended strategies. The problem with this is that many managers will end being recommended the same strategies, leading to more trading in the same direction.

(New York)

Artificial intelligence is one of the hottest concepts in tech, and one of the most intangible from an investing standpoint. Since “AI” seems to be something that most companies are developing internally, the concept remains difficult to invest in directly for most investors. Those wanting to invest in AI can look beyond Google, Facebook, and the rest of the FAANGs, however. According to one analyst, one should look for specific software companies that have “tremendous expertise in their specific industry, understand their customers’ businesses, and provide highly tailored solutions”. These include Aspen Systems, Guidewire Software, and Veeva Systems.

FINSUM: AI doesn’t have many widely available direct investing opportunities, so these seem like some very interesting picks if you want to bet directly on the technology.

(New York)

The president of Wells Fargo Advisors, David Kowach, shared his views on the industry yesterday. He says that advisors must embrace technology, bridge the generation gap, and become more professional in order to thrive. While some see technologies, like robo advisors or artificial intelligence, as a threat, Kowach says these may “displace lower-value activities, but not meaningful, deep client relationships and caring”. He says it is hard to disrupt advisors who really deeply understand their clients.

FINSUM: Pretty vague and bland platitudes about wealth management, but we thought some of our readers might like to hear them. We do agree that there is a human element to the client-advisor relationship which will be hard to disrupt.