Do AI-powered mutual funds perform better?

Rui Chen and Jinjuan Ren ()

Finance Research Letters, 2022, vol. 47, issue PA

Abstract: We evaluate the performance of artificial intelligence (AI)-powered mutual funds. We find that these funds do not outperform the market per se. However, a comparison shows that AI-powered funds significantly outperform their human-managed peer funds. We further show that the outperformance of AI funds is attributable to their lower transaction cost, superior stock-picking capability, and reduced behavioral biases.

Keywords: Artificial intelligence; Mutual fund performance; Behavioral biases (search for similar items in EconPapers)
JEL-codes: G11 G23 G41 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:47:y:2022:i:pa:s1544612321005547

DOI: 10.1016/j.frl.2021.102616

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