ChatGPT investment advice is better than most popular funds in UK

Autor: Financial Market
Timp de citit: 2 minute

A fictitious fund generated by ChatGPT performs significantly better than the average of the 10 most popular funds in the UK, which together lost 0.8% in value over the same period.

The ChatGPT fund has outperformed the real funds on 34 out of 37 market days (87%) during its lifetime so far. The biggest gap between them was on April 4, when ChatGPT gained 4.7% and the real funds fell 1.9% – a difference of 6.6%, according to an article from Finextra.

To create the fund, financial comparison site Finder asked ChatGPT to create a stock portfolio that incorporated a set of investment principles from leading funds. Despite two warnings that ChatGPT could not provide specific investment recommendations, this was quickly sidestepped by saying it was only a theoretical exercise.

ChatGPT eventually selected 38 stocks, with Meta, up nearly 30%, Microsoft, up 20%, and Intel Corporation, up nearly 18%, among the fund’s top performers.

According to CEO Jon Ostler, „It did not take long for the public to find creative ways for ChatGPT to help them in areas where it really should not. There are many examples of this, especially the person who used reverse psychology to get a list of illegal movie streaming sites, and it will not be long before a large number of consumers try to use the programme for financial gain.”

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While large funds use sophisticated AI platforms to refine their stock picks, ChatGPT remains a rudimentary platform with spotty data and little insight into market psychology.

A study conducted by Finder in 2021 found that half of UK investors currently use social media to get investment advice, and one-fifth use social media exclusively.

Would you rather get advice from an unqualified Tik-Tok star or from an AI capable of processing millions of data points from the internet and giving tailored advice?” asks Ostler.

The democratisation of AI appears to be something that will upend and revolutionise the financial industry, even if it’s still far too early for consumers to get carried away when it comes to their own finances.

Fund managers, however, may start to look nervously over their shoulders – especially since ChatGPT funds* like ours are currently outperforming many of them.