ChatGPT ‘portfolio’ outperforms leading UK funds

A selection of stocks picked by artificial intelligence chatbot ChatGPT has delivered better performance than some of the UK’s leading investment funds, according to an experiment conducted by finder.com.

Analysts at the personal finance comparison site asked ChatGPT to create a theoretical fund of more than 30 stocks, following a range of investing principles taken from leading funds.

In the eight weeks since its creation, the portfolio of 38 stocks has risen 4.9 per cent, compared with an average loss of 0.8 per cent for the 10 most popular funds on UK platform Interactive Investor, a list including Terry Smith’s Fundsmith Equity as well as a range of UK, US and global funds from Vanguard, Fidelity and HSBC, according to finder.com.

Jon Ostler, chief executive of finder.com, said: “It’s not taken the public long to find creative ways of getting ChatGPT to help them in areas where it shouldn’t technically do so.

This article was previously published by Ignites Europe, a title owned by the FT Group.

“It won’t be long until large numbers of consumers try to use it for financial gain.”

Some 19 per cent of UK adults surveyed by finder.com said they would “consider getting financial advice” from ChatGPT, while another 8 per cent say they had already taken financial advice from the chatbot.

“The big question is how bad of an idea using ChatGPT for investing research currently would be,” Ostler said.

“Big funds have increasingly been using AI for years, but the public using a rudimentary AI platform that openly says its data is patchy since September 2021 and lacks the intricacies of market psychology doesn’t sound like a good idea.”

However, he said research in 2021 indicated that half of UK investors used social media for investment advice.

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“Would you rather get your advice from an unqualified TikTok star or AI that is capable of processing millions of data points from around the web and giving tailored advice?” he asked, adding: “Of course, the ideal answer at the moment would be neither. Spending time researching via known primary sources or a qualified adviser would be the safer and recommended approach, but this may not be the case forever.”

Ostler said the democratisation of AI seemed set to disrupt and revolutionise financial industries, but argued it was too early for consumers to trust it when it came to their own finances.

“However, fund managers may be starting to look nervously over their shoulders,” he said.

*Ignites Europe is a news service published by FT Specialist for professionals working in the asset management industry. Trials and subscriptions are available at igniteseurope.com.