Bruce Keith , a Scottish-born CA, first came to India in 1991, at a pivotal time when India was undergoing sweeping economic liberalisation under the leadership of then Finance Minister Dr. Manmohan Singh. Since then, he has witnessed and navigated many highs and lows of international markets, while closely observing the remarkable technological advancements that have transformed the capital market ecosystem. The CEO and Co-founder of InvestorAi, one of the pioneers to adopt artificial intelligence for trading and investments, has explained how the fully automated investment advisory firm helps investors and his advise to retail investors.
Is there a human element in stock selection by InvestorAi. How does your platform work?
The entire market review and stock selection is automated and runs on our own proprietary foundational AI stack. We have a human in the loop to review the final output before any results are published.
How frequently do you churn your portfolios… Will frequent changes in stocks in a portfolio not impact investors’ return due to transaction costs?
It really depends on the portfolios. Investors who want to buy our intra-day baskets are obviously churning on daily. As to regular equity baskets, the rebalance duration is two weeks to two months, depending on the portfolio. Costs always go up with rebalancing frequency, so it is important that short duration baskets capture sufficient alpha to justify the rebalance frequency.
Who are your target investors? Do you have separate strategies for individuals?
We currently distribute via brokers and have different products for different broker clients. I would characterise the majority of our current client base as mass affluent – people with sufficient funds to invest a portion in an equity basket, and interested enough in the outcome to be involved through rebalancing.
There are several AI-platforms advising investors? How different are you from them?
There was recently a white paper released by the Universities of Tsinghua, Shanghai Jiao Tong and Adelaide. It found that AI based on LLM technology was not good for stock picking over a short to medium term basis. We broadly agree with the conclusions and as such we built our own foundational AI and sovereign models. We are strong believers in the power of vertical AI – using very deep domain expertise to develop and deploy specific use cases.
What is your client base?
Our business model is based on subscriptions – you can keep investing more at no additional cost. As such we measure the number of subscribers which is currently at slightly over 30,000. We are available on most platforms and across over 20 brokers. From a portfolio performance perspective, we tend to be consistently ranked near the top across multiple market conditions and events.
Any plans to enter the mutual fund space or PMS?
We have applied for an AIF licence and intend to launch our first fund (subject to approval) this year.
Your advice to retail investors in the current volatile phase.
Stay invested. Post Pandemic, markets have largely tracked upwards – stick with something long enough and you will do ok. This is the first bump in the road that many new investors have felt, and they run the risk of having their fingers burnt.
AI strategies, built the right way (incorporating modern portfolio theory and basic investment disciplines) really do take the human emotion and bias out of decision making and should help people avoid the worst mistakes and put them on the right path for growth as markets inevitably come back.