Stocks chosen by ChatGPT significantly outperform UK fund managers

According to media reports, a basket of stocks selected by ChatGPT, a chatbot powered by artificial intelligence (AI), outperformed some of the most prominent investment funds in the UK.

CNN reported that a dummy portfolio of 38 stocks gained 4.9% between March 6 and April 28 while 10 prominent investment funds lost an average of 0.8%, according to an experiment conducted by the financial comparison website finder.com.

Jon Ostler, CEO of Finder, predicted earlier this week that “it won’t be long before a large number of consumers attempt to use (ChatGPT) for financial gain.”

The S&P 500 index, which measures the 500 most valuable companies in the United States, increased by three percent over the same eight-week period. The equivalent index in Europe, the Stoxx Europe 600, increased by 0.5% during this time period.

CNN reported that a typical investment fund collects funds from multiple investors and is overseen by a fund manager who determines how to invest the funds.

As a benchmark for evaluating the performance of the ChatGPT-generated fund, Finder’s analysts used the ten most popular UK funds on trading platform Interactive Investor. Funds administered by HSBC and Fidelity were selected.

The analysts requested that ChatGPT select commodities based on a number of widely accepted criteria, such as selecting companies with a low level of debt and a history of growth. Microsoft, Netflix, and Walmart were selected as companies.

CNN reported that while large funds have used AI to support their investment decisions for years, ChatGPT has placed the technology in the hands of the general public and has the potential to guide the investment decisions of retail investors.

Finder conducted a survey of 2,000 UK adults last week and found that 8% had already used ChatGPT for financial advice, while 19% said they would contemplate doing so.

CNN reported that 35% of respondents said they would not consider using a chatbot to assist them make financial decisions.

In a study published in April, researchers from the University of Florida discovered that ChatGPT was able to determine the stock price movements of specific companies with greater precision than some more fundamental analysis models.