Stock market’s future lies in AI? ChatGPT outperforms leading UK fund managers

In it’s latest feat, a basket of stocks selected by ChatGPT, has far outperformed some of the most popular investment funds in the United Kingdom.

Financial comparison site finder.com revealed that between 6 March and 28 April, a dummy portfolio of 38 stocks gained 4.9% while 10 leading investment funds clocked an average loss of 0.8%. 

finder.com also revealed that over the same eight-week period, the the S&P 500 index, which tracks the 500 most valuable companies in the United States, rose 3%. Europe’s equivalent, the Stoxx Europe 600 index, ticked up 0.5% in that time.

A typical investment fund pulls together money from multiple investors, and is overseen by a fund manager who decides how to invest that money.

Finder’s analysts took the 10 most popular UK funds on trading platform Interactive Investor as a benchmark for assessing the performance of the ChatGPT-generated fund. Funds managed by HSBC (HSBC) and Fidelity were among those selected.

The analysts asked ChatGPT to select stocks based on some commonly used criteria, including picking companies with a low level of debt and a track record of growth. Microsoft (MSFT), Netflix (NFLX) and Walmart (WMT) were among the companies selected.

While major funds have used AI for years to support their investment decisions, ChatGPT has put the technology in the hands of the general public, with the potential to guide the decisions of retail investors.

A survey of 2,000 UK adults conducted by Finder last week showed that 8% had already used ChatGPT for financial advice, while 19% said they would consider doing so.

Yet a much bigger 35% said they would not consider using the chatbot to help them make decisions about their money.

ChatGPT can predict stock-price movement? 

Last month, researchers at the University of Florida found that ChatGPT could predict the stock price movements of specific companies more accurately than some more basic analysis models.