A fictional fund generated by ChatGPT is significantly outperforming the average of the UK’s 10 most popular funds, which have collectively lost 0.8% in value during the same period.
The ChatGPT fund has led the real funds for 34 of the 37 market days (87%) of its existence. The widest gap occurred on April 4th, when ChatGPT was up 4.7% while the real funds were down 1.9%, resulting in a difference of 6.6%.
To create the fund, the personal finance comparison site Finder prompted ChatGPT to develop a portfolio of stocks based on various investment principles from leading funds. Despite being warned that it “cannot provide specific investment advice,” engagement continued as the request was framed as a theoretical exercise.
ChatGPT chose 38 stocks, with top performers including Meta, which has risen nearly 30%, Microsoft, up 20%, and Intel Corporation, up nearly 18%.
Jon Ostler, CEO of Finder, remarked, “It didn’t take long for the public to find innovative ways to engage ChatGPT in areas where it shouldn’t fundamentally operate. Numerous instances exist, such as someone using reverse psychology to obtain a list of illegal movie streaming sites. It won’t be long until more consumers look to leverage it for financial benefits.”
While large funds employ sophisticated AI platforms for stock selection, ChatGPT remains a basic tool with inconsistent data and limited market psychology insights.
Research from Finder in 2021 revealed that half of British investors rely on social media for investment advice, with one in five depending solely on social networks.
Ostler posed the question: “Would you prefer advice from an unqualified TikTok star or from AI capable of processing millions of data points to offer tailored guidance?” He suggested that the democratization of AI could disrupt and revolutionize the financial industry, although it is still too early for consumers to overly rely on it for personal finances. Meanwhile, fund managers may be watching closely, especially with ChatGPT-based funds currently outperforming many established options.