According to Bloomberg, JPMorgan Chase is using OpenAI’s GPT-4 model for a number of thematic asset baskets.
The tool, called IndexGPT, identifies keywords associated with a topic before inserting them into a natural language processing model that sifts through news articles to identify companies operating in the field.
Thematic indexes identify potential investments based on trends such as the rise of robotics or e-sports. They became popular with retail investors around 2020, but have since seen their reputation decline due to poor performance, it is said Bloomberg.
IndexGPT is aimed at institutional clients and generates twice as many keywords as the software used for previous funds, meaning a “superior representation of the theme,” says Rui Fernandes, head of market trade structuring at JPMorgan.
“It’s about being able to pick a broader range of stocks that aren’t necessarily the obvious companies that everyone already knows,” he tells Bloomberg.
