Efficiency and Return of AI-Based Investment Strategies in Diversified Portfolios
DOI:
https://doi.org/10.5281/zenodo.13845143Keywords:
Artificial intelligence, investment management, emerging markets, Latin America, risk-adjusted return, portfolio diversification, investment fundsAbstract
This study investigates the efficiency and returns of artificial intelligence (AI)-driven investment strategies in diversified portfolios of investment funds in Latin America. Using historical data (2013-2022) from funds in Brazil, Mexico, Colombia, and Peru, the risk-adjusted performance of AI-managed portfolios was compared to traditionally managed portfolios. The findings revealed that AI-driven portfolios achieved a significantly higher average Sharpe ratio (1.16) compared to traditional portfolios (0.91), indicating superior risk-adjusted returns. Additionally, AI-managed portfolios exhibited greater geographical and asset class diversification. This study highlights the potential of AI to enhance investment management in emerging markets and provides valuable insights for investors, fund managers, and regulators.
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