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Money Management

February 9, 2024

Aussie fund selectors believe AI is ‘here to stay’


Jasmine Siljic

Three-quarters of Australian fund selectors maintain that artificial intelligence (AI) is here for the long haul, Natixis Investment Managers (IM) reports.

The global asset manager’s report, which surveyed 500 investment professionals across 26 countries including Australia, has revealed fund selectors’ current sentiments towards AI.

The research uncovered that 75 per cent of Australian respondents say AI is here to stay in the investment landscape, contrasting fears that the technology is a bubble. Three-quarters also expect the technology to help them discover hidden risks.

Nearly seven in 10 (69 per cent) believe these new technologies will assist them in unlocking investment opportunities which were not clearly visible before, while 44 per cent think AI presents even larger opportunities than the internet.

Moreover, 25 per cent of Australian fund selectors are already using AI to help their investment analysis. However, this local adoption is low in comparison to 51 per cent of global respondents already utilising AI to aid their analysis.

“While sentiment on the investment opportunity is positive, fund selectors still express reservations about the potential downside in the rapid development and adoption of artificial intelligence,” Natixis IM stated.

Some 34 per cent of global respondents still believe AI is an asset bubble, alongside 42 per cent of global participants who think AI’s risks are greater than the opportunities it presents.

Geir Lode, head of global equities at Federated Hermes, recently explained that predicting AI winners over the next decade will be challenging due to the rapid progress in AI innovation and the evolving landscape of AI regulation.

“The uncertainty is further amplified by the remarkable pace at which computational resources continue to expand, fuelling AI’s capabilities and applications. In 2023, the sheer depth and scale of AI’s potential has driven a rally in AI hardware stocks, for example specialist semiconductor and infrastructure providers. The question then becomes when and where will the rally spill over into software stocks,” he observed.

Last month, Hyperion Asset Management and Munro Partners also identified AI as a trend they are embracing in 2024, which could greatly reward market leaders.

The $2.4 billion Hyperion Global Growth Companies Fund holds shares in companies such as Amazon, Microsoft and Spotify among its top five holdings, while Munro holds Nvidia, Amazon, Microsoft and Alphabet in its top five in the Munro Global Growth Fund.

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