ChatGPT has led the real funds for 116 out of the 121 market days (95.87%)
A fund consisting of 38 stocks chosen by ChatGPT has consistently outperformed the UK’s top 10 most popular funds. This fictional fund was created as part of a conceptual experiment and, as of the 25th of August, it has been significantly outperforming the UK funds. In fact, ChatGPT has led the real funds for 116 out of the 1212 market days (95.87%) of its lifespan so far.
The personal finance comparison site, finder.com, has been tracking the ChatGPT portfolio and the average return of the top 10 funds since 6th March 2023 and the AI fund has shown higher returns over this period.
The latest figure from the 25th of August (market day 121) showed that the ChatGPT fund has grown 9.63%, whilst the UK funds have collectively risen by 0.43%, meaning that there was a difference of 9.20 percentage points between the two.
The top 10 UK funds, which include a range of UK, US and global funds from Vanguard, Fidelity and HSBC, spent 45 out of the first 50 market days below 0. After day 50, the gap between the two funds has been consistently widening, averaging 7.20 percentage points.
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The biggest difference between ChatGPT and the UK funds was on day 107, (7th of August) as ChatGPT was higher than the UK funds by 9.62 percentage points.
The best day for both the ChatGPT fund and the UK top 10 funds was on 1st August 2023, market day 103 of the experiment, as ChatGPT rose to 12.28%, and the UK funds increased to 3.47%. The two funds had one of their widest gaps on this day as well, as there was a difference of 8.81 percentage points between them.
ChatGPT chose 38 stocks, with the top performers in the fund so far being Meta, up 54%, Adobe, up 53%, and NVIDIA, up 92%. The worst performers in the fund so far are 3m Company, down -11%, Johnson Control International, down -10%, and Illumina, down -29%, which have all been down since the beginning of August.
How do consumers feel about taking financial advice from ChatGPT?
When asked in April about the recent explosion of interest in AI software, 1 in 5 (19%) of UK adults said they would consider getting financial advice from ChatGPT. A further 8% said they had already taken financial advice from it.
This number was significantly higher among younger generations. 28% of millennials and 23% of gen Z said they would consider using the software for financial advice, compared to just 1 in 10 (10%) baby boomers and 1 in 20 (5%) of the silent generation.
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Around a third (35%) of Brits said they wouldn’t consider financial advice from the platform currently, and 38% said they weren’t sure what ChatGPT was.
Only 1 in 10 (8%) people already use ChatGPT for their financial advice, and 1 in 5 (19%) say that they would consider using ChatGPT for financial advice in the future. According to the data found from Finder’s investment fund, the best stocks to invest in (according to the August data) would be NVIDIA and Adobe.
CEO of the personal finance comparison site, finder.com, Jon Ostler, 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. There have been lots of examples of this, notably the person who used reverse psychology to get a list of illegal movie streaming sites, and it won’t be long until large numbers of consumers try to use it for financial gain.
“The big question is how bad of an idea using ChatGPT for investing research currently would be. 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. Yet a white paper we did in 2021 found that half of British investors use social media to get investing advice, and a fifth only use social media. Would you rather get your advice from an unqualified tik tok star or AI that is capable of processing millions of data points from around the web and giving tailored advice?
“Of course the ideal answer at the moment would be neither. Spending time researching via known primary sources or a qualified advisor would be the safer and recommended approach, but this may not be the case for ever. The democratisation of AI seems to be something that will disrupt and revolutionise financial industries although it is far too early for consumers to get carried away when it comes to their own finances. However, fund managers may be starting to look nervously over their shoulders – especially with ChatGPT funds* like ours currently outperforming many of them!”
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