Information, Uncertainty, and Active Investment Management

Kenneth Blay, Head of Research for Global Thought Leadership, Invesco

The asset management industry is in the midst of a marked transformation. The long and measured evolution of asset management that now provides investors with broad access to low-cost, diversified, efficient portfolios is now converging with notable advancements in computing power, the proliferation of new data sources, the ongoing development of novel analytical methods, and the adoption of artificial intelligence. While these innovations offer the promise of dramatic improvements across the economic landscape, they have also resulted in uncertainty becoming an increasingly prominent feature of the financial markets.

As such, managing uncertainty, along with risk and return, will need to be a key focus for investment practitioners. This will require investors to re-consider how they think about the different types of information that drive asset prices, passive investing, the role of active management, diversification, portfolio construction, and even the potential impacts of artificial intelligence on investing.
In this presentation we revisit the practical and theoretical ideas that have shaped modern asset management and contemporary views on active and passive investing. We then explore how those ideas have evolved and re-introduce ideas from visionary thinkers in economics, finance, and computing that are relevant to managing both information and uncertainty. Finally, we discuss the key implications and challenges for the practice of investment management.

Conference website