AI: Leveling the Divide Between Discretionary and Systematic Investing

What You Need to Know

AB’s Chief AI Officer, Andrew Chin, explores AI advances in Leveling the Divide Between Discretionary and Systematic Investing: How AI Enables Breadth and Depth. The research paper, recently published by The Journal of Portfolio Management, includes these key findings:

• AI, especially large language models (LLMs), are dissolving the boundaries between traditional discretionary (fundamental) investing and systematic (quantitative) approaches.
  
  
• LLMs broaden the reach of discretionary investors by applying their insights over a larger universe of investment opportunities. They also extend the nuance and depth of systematic investors by quantifying the qualitive.
  
  
• In this new world, alpha generation will be driven by unique datasets, expert application and customization of LLMs through prompting and fine tuning, and the efficient delivery of actionable insights.

© 2025 With Intelligence. Republished with permission of Portfolio Management Research, from The Journal of Portfolio Management, Volume 51, Number 9, © 2025. For more information, please visit www.pm-research.com. All rights reserved.