Asset managers like JPMorgan and Voya Investment Management are adopting artificial intelligence tools to improve investment decisions and monitor risks. Despite the potential benefits, some experts express doubts about AI’s impact on long-term returns in asset management.
Asset managers are increasingly incorporating artificial intelligence (AI) to enhance investment decisions, monitor portfolio managers, and identify lucrative opportunities. A notable example is JPMorgan, which plans to expand later this year its use of a generative AI tool named “Moneyball.” This tool, part of JPMorgan’s Spectrum portfolio management platform, aims to correct biases in portfolio managers’ decisions by showing how they and the market have behaved in similar past situations.
Other firms, such as Voya Investment Management, have also adopted AI. Voya uses a virtual analyst to monitor potential stock risks, providing a dashboard where AI feedback complements human analysts’ reviews. Legalist, a hedge fund specializing in litigation finance, employs a proprietary AI search tool called “Truffle Sniffer” to find promising investment targets among civil suits, based on court records indicating favorable outcomes.
Additionally, an exchange-traded fund by South Korea’s LG and SoftBank-backed Qraft Technologies utilizes an AI stock-picking tool, generating monthly reports explaining investment decisions.
However, skepticism remains regarding AI’s ability to contribute to long-term returns. David Giroux, a veteran portfolio manager at T. Rowe Price, argues that most AI in asset management focuses on short-term gains rather than long-term earnings potential.
