Should artificial intelligence play a role in the investing process? Well, it may be better than you think, according to new research.
Finder compared the performance of Australia's top investment funds against portfolios designed by AI – ChatGPT and Bard – over a three-month period to see which one would perform better.
The analysis revealed Bard outperformed both ChatGPT and the top 10 listed managed funds in Australia – holding 19 stocks and rising 8.2 per cent, between May and August 2023.
This was followed by the top 10 listed managed funds, which rose 6.3 per cent, on average, and the portfolio created by ChatGPT - holding 23 stocks - which rose 4.21 per cent, on average.
ChatGPT and Bard were both asked to create a stock portfolio using the main investment strategies and approaches used by the top 10 managed funds in Australia.
ChatGPT selected 23 stocks, mostly from the United States. Its portfolio was diversified across sectors and included some stocks from Australia, the UK and parts of Asia.
Bard, on the other hand, selected 19 stocks, mostly from the US and largely within the technology sectors.
To put fund managers to the test, the 10 most popular, actively managed listed funds on the ASX were used as a benchmark. Popularity was rated in terms of funds under management.
Finder investment expert Kylie Purcell said while Bard had the top-performing portfolio, the biggest winner was actually the S&P 500 index, which rose 9.3 per cent over the test period.
“Ultimately the study shows just how difficult it is to beat the market, whether you’re a top fund manager or an AI-powered chatbot,” Purcell said.