JPMorgan Chase is utilizing OpenAI’s GPT-4 model to create various thematic investment baskets, as reported by Bloomberg.
The new tool, named IndexGPT, identifies relevant keywords related to specific themes and employs a natural language processing model to scan news articles for companies engaged in those areas. Thematic indexes target potential investments based on emerging trends, such as robotics and e-sports. Although these indexes gained popularity among retail investors around 2020, their appeal has diminished due to underwhelming performance, according to Bloomberg.
IndexGPT is designed for institutional clients and can generate double the number of keywords compared to previous fund management software, leading to a "superior representation of the theme," as stated by Rui Fernandes, head of markets trading structuring at JPMorgan. He emphasizes, “It’s about being able to select a broader range of stocks that are not necessarily the obvious companies that everyone already knows about.”
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