AI in Portfolio Management: Can Algorithms Outperform Human Fund Managers?

Author(s)	Shantanu Chakravarti
Country	India
Abstract	This study explores whether AI-driven portfolio management systems can outperform traditional human fund managers in terms of returns and risk-adjusted performance. Drawing on secondary research from global studies between 2020 and 2024, findings indicate that AI-managed funds perform better during market downturns due to superior data analysis and emotion-free decision-making, while human managers excel in bullish markets that reward intuition and qualitative judgment. Ethical and governance concerns; particularly transparency, data bias, and accountability; remain major challenges for AI adoption. The study concludes that hybrid models integrating algorithmic precision with human oversight represent the optimal approach for sustainable portfolio management.
Keywords	Artificial Intelligence, Portfolio Management, Fund Performance, Behavioural Finance, Risk-Adjusted Returns, Machine Learning, Ethical Governance, Investment Strategy, Market Cycles, Hybrid Models
Field	Business Administration
Published In	Volume 17, Issue 1, January-March 2026
Published On	2026-01-10
DOI	https://doi.org/10.71097/IJSAT.v17.i1.9900
Short DOI	https://doi.org/hbjmp8

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