JPMorgans asset management division employs 1300 portfolio managers and research analysts globally across stocks, bonds, derivatives and alternative asset classes, with $US400 million a year invested into technology to leverage AI and machine learning models. <\/p>\n
That hasnt stopped JPMorgans rivals from also investing, with a PwC global asset management survey showing that more than 90 per cent of investment firms are already using disruptive technology such as AI within their business. <\/p>\n
On AI, we decided a long time ago to build our own tech and not rent someone elses, Mr Gatch said. I think thats now a competitive advantage for our portfolio managers and clients. <\/p>\n
The global market for AI in asset management is estimated to be worth about $US2.6 billion in 2022 and is expected to expand at a compound annual growth rate of 24.5 per cent over the next seven years, according to one estimate by US firm Grand View Research. <\/p>\n
Earlier this year BlackRock, the worlds largest asset manager, described AI in its mid-year investment outlook as a mega force trend that would help unlock the value of the data gold mine some companies may be sitting on. <\/p>\n
Elsewhere, JPMorgan is among a slew of investment banks, including Macquarie, that are launching more ETF products into the Australian market to challenge the dominance of BlackRock, Vanguard and State Street. <\/p>\n
Mr Gatch said the global ETF industry had attracted $US1.4 trillion of funds in 2022, versus $US700 billion for traditional investment funds unlisted on exchanges. <\/p>\n
In Australia, data from Betashares shows the local ETF industry recorded $13.5 billion of net inflows last year, versus outflows of $26.8 billion from unlisted managed funds. <\/p>\n
JPMorgans strategy to grab market share is to offer so-called active ETFs that may outperform the traditional index-tracking products. The firm forecasts active ETF inflows to grow at a 40 per cent annual rate for the next five years, compared to 17 per cent for indexed ETFs. <\/p>\n
That has big implications for how we run our business and whats happening is fairly astonishing, Mr Gatch added. <\/p>\n
The story is no longer about indexing, we think that [active] will drive a wave of dramatic growth into the industry. <\/p>\n
The JPMorgan Equity Premium Income Product is said to have attracted more inflows than any other ETF in 2023, with net assets of around $US29 billion in November. Much of its popularity is due to an active strategy of selling call options that provide extra income if the market falls or tracks sideways. <\/p>\n
On fees, the CEO said asset managers, including the ETF sector, remained under pressure, but JPMorgans investment in digital currency and blockchain technology could eventually bring costs down. <\/p>\n
Were doing a bunch of stuff on blockchain, he said. We have working groups looking at tokenisation for private markets, how to improve liquidity between institutions for private credit. Its going to take time, but weve got smart people, and operational efficiency is important. <\/p>\n
As for JPMorgan launching a bitcoin ETF, its not on the agenda anytime soon. No, weve not done [regulatory] filings. <\/p>\n
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JPMorgan's George Gatch says artificial intelligence gives them firm ... - The Australian Financial Review<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" JPMorgans asset management division employs 1300 portfolio managers and research analysts globally across stocks, bonds, derivatives and alternative asset classes, with $US400 million a year invested into technology to leverage AI and machine learning models. That hasnt stopped JPMorgans rivals from also investing, with a PwC global asset management survey showing that more than 90 per cent of investment firms are already using disruptive technology such as AI within their business. On AI, we decided a long time ago to build our own tech and not rent someone elses, Mr Gatch said. Continue reading