Tech trade tools gather pace
Robo-advisers and algorithmic trading tools are expected to see increased usage for future investment as these sophisticated trading schemes have averaged a return of 6-8% per year during the past three years, said SCB Securities (SCBS).
As the markets continue to change, manual trading of securities will face greater difficulty in generating good returns, with investors facing growing challenges to mitigate myriad risks, said Chalermwut Chomanan, assistant manager for the product and platform group at SCBS.
Technological trading tools will garner more prominence in the future, said Mr Chalermwut.
Sophisticated trading programs will help calculate the right market timing and other investment data will help investors with trading decisions on securities, he said.
"The best return for the algorithmic trading model is around 6-8%. This is the riskiest model, level five, which focuses on equity investment. This portfolio includes global equities, which can offer higher returns than domestic equities," said Mr Chalermwut.
"Asset allocation into different areas will diversify investment risks and provide an opportunity to generate higher returns."
He said the trend of using artificial intelligence and robo-advisers has increased, as well as for algorithmic trading.
Market sentiment has changed, making robo-advisers preferable to analysts in understanding when to trade.
Algorithmic trading and automatic trading programs have a much faster speed in executing trading orders.
Institutional and foreign investors have increasingly used these trading programs to execute their trading orders, hoping to maximise returns.
But such trading systems pose a new challenge to financial systems because they increase volatility in bourses, highlighted by the Flash Crash of May 6, 2010.
For the robo-advisory investment program provided by SCBS, fund managers adjust the portfolio every quarter, with an open architecture structure for flexible management.
There are five investment levels offered, with level one carrying the least risk and level five the highest risk.