A basket of equities chosen by ChatGPT, an artificial intelligence (AI)-powered chatbot, has outperformed some of the most popular investment funds in the United Kingdom.
According to an experiment done by financial comparison site finder.com, a dummy portfolio of 38 equities gained 4.9 percent between March 6 and April 28, while 10 prominent investment funds lost an average of 0.8%.
It wouldn’t be “long before large numbers of consumers try to use [ChatGPT] for financial gain,” Finder’s CEO Jon Ostler warned earlier this week.
The S&P 500 index, which monitors the 500 most valuable corporations in the United States, climbed 3% over the same eight-week period. In that time, Europe’s equivalent, the Stoxx Europe 600 index, rose 0.5%.
A conventional investment fund pools money from various participants and is managed by a fund manager, who determines how to invest it.
For measuring the performance of the ChatGPT-generated fund, Finder’s analysts used the ten most popular UK funds on trading platform Interactive Investor as a benchmark. Among those chosen were funds handled by HSBC and Fidelity.
The analysts requested ChatGPT to choose stocks based on several regularly used criteria, including as companies with low debt levels and a track record of growth. Microsoft, Netflix, and Walmart were among those chosen.
While major funds have utilized AI to support their investing decisions for years, ChatGPT has put the technology in the hands of the general public, with the potential to guide regular investors’ decisions.
According to a recent Finder study of 2,000 UK adults, 8% have actually used ChatGPT for financial advice, while 19% stated they would consider doing so.
However, a significantly larger 35% stated they would not contemplate utilizing the chatbot to help them make financial decisions.
Nonetheless, “fund managers may be starting to look nervously over their shoulders,” according to Ostler.
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Researchers at the University of Florida discovered in an April study that ChatGPT could predict the stock price fluctuations of specific firms more accurately than some more basic analysis models.
Since research firm Open AI made ChatGPT available in December, users have been astounded by its capacity to deliver lengthy, intelligent solutions to inquiries.
Concerns have been expressed about the technology’s possible applications, which range from composing high school essays to providing medical advice. These applications might provide inaccurate information, allow kids to cheat on exams, and evict real people from their employment.
According to Ostler at Finder, the “safe and recommended” option for individual investors is to perform their own research or consult with a certified financial adviser. He warned that it was too soon for investors to put their money in the hands of AI.
Nonetheless, “the democratization of AI seems to be something that will disrupt and revolutionize financial industries,” according to Ostler.
