AI, algorithms and human judgement: The future of portfolio management

Artificial intelligence, or AI, has been the buzzword on the Street over the past year. In 2026, the AI theme has moved beyond the technology sector, driving a broader investment narrative around data centres, semiconductors, power infrastructure and the massive capital spending needed to support the next phase of AI development.

The scale of the AI boom has also forced investors to rethink how they analyse opportunities, assess risks and construct portfolios.

These themes will be in focus at Sandeep Tandon’s masterclass, Man or Machine? Future of Portfolio Management, at the ET Alpha Wealth Summit 2.0 in Mumbai on October 8. The session will explore how AI, algorithms and human judgement are converging to reshape portfolio construction, risk management and the future of wealth allocation.

AI-powered portfolios

From company earnings and macroeconomic indicators to market trends, news flows and alternative datasets. For portfolio managers, this can help identify patterns, generate investment signals and screen a much larger universe of stocks than traditional methods allow.

Algorithms can also be used to optimise asset allocation, rebalance portfolios and run different scenarios to assess how portfolios could respond to changes in interest rates, inflation, currency movements and market volatility.

What will be the role of humans?

Portfolio management is not simply a data-processing exercise. Markets can be driven by events that are difficult to model, while investor behaviour can often defy historical patterns.

This is where human judgement continues to play a crucial role. Portfolio managers can question model outputs, assess the quality of the underlying data and bring context to situations where algorithms may struggle. They can also decide when a seemingly attractive signal does not fit the broader investment thesis.

The future, therefore, may not be about choosing between man and machine, but about combining the strengths of both.

Next phase of wealth management

The convergence of AI and human expertise could make portfolio management more dynamic and personalised. AI could increasingly serve as a decision-support tool, helping managers analyse more information, identify risks earlier and test investment strategies faster.

For investors, this could eventually translate into more customised asset allocation and quicker responses to changing market conditions. However, the rise of AI also brings challenges around data quality, model risk, transparency and over-reliance on automated decisions.

As AI reshapes industries and markets, its next big role could be in the investment process itself, not necessarily replacing portfolio managers but changing how investment decisions are made.

Join the conversation shaping the future of wealth management at the ET Alpha Wealth Summit 2.0 on October 8. Register Now.