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Banking & Finance

Goldman Sachs to let AI make investment choices in Japan

New fund expected to fuel competition with domestic asset managers

TOKYO -- Goldman Sachs Asset Management is bringing an investment trust to Japan that uses artificial intelligence to make decisions.

The product will be introduced on Feb. 24. Goldman's AI processor will sort through huge amounts of data to select promising investment targets, according to the U.S. asset manager.

The move is expected to fuel competition in Japan, where asset managers, including Mitsubishi UFJ Kokusai Asset Management, are introducing similar products.

The instrument, dubbed "GS global big data investment strategy," will invest in about 200 stocks in advanced economies in a bid to outperform the market average.

It will be sold to retail investors in Japan through major brokerages, including SMBC Nikko Securities.

Goldman started to use AI in investing around 2008. It currently sells AI-using investment trusts in its home market and in Europe.

The type of AI Goldman uses is called natural language processing, which lets computers process human language.

The system has already "learned" huge amounts of relevant data, including over a million analyst reports and 26 million news reports. These will be used to analyze incoming data to, for example, judge the profitability of a company or find out whether its shares are undervalued.

The company said investment trusts using the same system have performed well, returning 5.8% in the past year and 28.1% in the past three years, in dollar terms.

(Nikkei)

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