AI in Portfolio Management: Can Algorithms Outperform Human Fund Managers?

This study explores whether AI-driven portfolio management systems can outperform traditional human fund managers in terms of returns and risk-adjusted performance. Drawing on secondary research from global studies between 2020 and 2024, findings indicate that AI-managed funds perform better during market downturns due to superior data analysis and emotion-free decision-making, while human managers excel in bullish markets that reward intuition and qualitative judgment. Ethical and governance concerns; particularly transparency, data bias, and accountability; remain major challenges for AI adoption. The study concludes that hybrid models integrating algorithmic precision with human oversight represent the optimal approach for sustainable portfolio management.