Major asset management firms like JPMorgan, Voya Investment Management, and Legalist are leveraging AI tools to improve investment decisions and enhance portfolio monitoring. While AI adoption is on the rise, concerns linger about its effectiveness in driving long-term returns in asset management.
Asset managers are increasingly integrating artificial intelligence (AI) to enhance investment decisions, monitor portfolio managers, and identify profitable opportunities. JPMorgan plans to expand a generative AI tool named “Moneyball” later this year, which identifies questionable decisions by portfolio managers, such as selling high-performing stocks prematurely. Kristian West, head of JPMorgan Asset Management’s investment platform, stated that the tool helps managers correct biases by showing how they and the market behaved under similar circumstances.
Voya Investment Management has also adopted a virtual analyst to track stocks for potential risks, complementing their $331 billion portfolio managed by human researchers. Their AI tool provides valuable feedback and flags stocks, aiding in the decision-making process alongside human analysts.
Legalist, managing a $1 billion hedge fund focused on litigation finance, uses an AI tool called “Truffle Sniffer” to scan court records for signs of favorable case outcomes. Co-founder Eva Shang mentioned that the tool identifies strong litigation cases where money is yet to be collected.
Additionally, South Korean conglomerate LG and Qraft Technologies launched an AI-powered exchange-traded fund (ETF) that utilizes AI to manage stock portfolios. The LQAI ETF uses an AI-generated monthly holdings report explaining its investment decisions.
Despite these advancements, there is skepticism about AI’s ability to drive long-term returns. David Giroux, who manages T Rowe Price’s $59 billion Capital Appreciation fund, argued that current AI applications in asset management mostly target short-term gains and do little to predict long-term earnings potential.
