South African investors who love flesh-and-blood stock-pickers should prepare for a step change as the investment industry is disrupted by automation, machine learning and artificial intelligence (AI). Less human input could improve returns and reduce costs in the long run. Vladimir Nedeljkovic, chief investment strategist at Alexander Forbes Investments, says the big move internationally to passive, and particularly smart-beta investments, is putting managers' profits under pressure. Managers will in future earn their fees by selecting and combining investments and asset classes optimally and managing risks rather than managing money directly, Nedeljkovic says. Local investment managers are lagging behind their overseas counterparts in embracing AI, but a few fledglings are offering AI-managed funds to individual investors. Elize Botha, managing director of Old Mutual Unit Trusts, and Grant Watson, head of the customised solutions boutique that manages index and quantitative funds ...

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