I don’t understand, why it’s so hard to call an apple, an apple and a poor performance, a poor performance. We celebrate failure as the foundation stone for the tech revolution and we find it so hard to admit poor performance, when it comes to funds. There should be a more open conversation. What went wrong? Was it just the performance? Or was it AI? Or was selecting from the base basket, consistently, a near impossibility? Could it be lack of trust in a product?

“The fund is down but we believe in the process, the outcome will come. We are not shutting it down.”

Survivorship bias is the bigger mystery we may never solve.

Artificial Intelligence is not magic, it is computational statistics. Anticipating the future beyond a few days, weeks, is new age science. You can not extract intelligence using old tech. Hence AI practitioners should first try their hand on building an apples to apples comparison before they try a sub-set selection.

“Let’s see if our AI can beat the S&P 500 before we select stocks from the 500.”

Let’s try easier problems before the harder ones.

Source: Google Finance

AlphaBlock Team

Rob, Carrick, “An AI powered ETF is being shut down, What went wrong?”, The Globe and Mail, March 18, 2022