Harvard-Led Study Says AI Can Predict 71% of Active-Fund Trades

Day after day, Wall Street investors fret that artificial intelligence could disrupt white-collar industries by turning expert human judgment into code.

Stock picking appears to sit squarely in the path of that disruption.

A new academic study led by a Harvard Business School professor finds that much of what active fund managers do follows patterns machines can learn. Using a machine-learning algorithm called a neural network, the system could predict about 71% of mutual-fund trading decisions — whether a manager would buy, sell or hold a given stock over a quarter.

The model was trained on rolling five-year ...