Forget ChatGPT, an AI-based portfolio creation fund that doubles investor returns

Tram Ho

ChatGPT is an AI-powered chatbot, programmed to simulate human conversation, released through OpenAI’s website. Rated as a more powerful tool than any chatbot has ever been, ChatGPT can write scripts, write college-level essays, write content…

But if asked for this tool to create a great portfolio, ChatGPT would respond like this: “ChatGPT cannot predict the future of the market or provide an investment advice. You must do your own research or consult a financial advisor before making an investment decision, especially when the stock market is a place with very high volatility.”

Quên ChatGPT đi, một quỹ đầu tư dựa trên AI tạo danh mục giúp lợi nhuận nhà đầu tư tăng gấp đôi - Ảnh 1.

Therefore, many experts believe that products in the field of artificial intelligence are not yet ready to conquer the financial world.

However, the $102 million AI Powered Equity ETF (AIEQ), launched in 2017, has quietly met this requirement. AIEQ is developed by EquBot and overseen by ETF Managers Group. The software uses 24/7 quantitative modeling on IBM’s Watson supercomputer platform to evaluate more than 6,000 US companies and balance portfolios. According to the development company, AIEQ can quickly change the holding ratio according to the market situation, not fixed.

Since its launch in 2017, the fund has brought in 41% returns for investors, but that figure for the S&P 500 is up to 72%. According to Business Insider, this 114-item portfolio has grown 10.4% in the first month of 2023, while the Vanguard Total Stock Market ETF is up 5% in the same time period.

Also in January 2023, AIEQ recorded a 9.9% gain in January this year, double the 4.7% increase of the S&P 500 index.

However, ETF.com has emphasized, this fund is actively managed and more expensive than the standard fund, so the actual return of investors will be lower. AIEQ is charged 0.75%, while Vanguard’s cost is 0.03%.

Chris Natividad, Chief Investment Officer at Equbot, said the AIEQ fund developed by Watson is able to analyze in more detail than standard market data and sift information from financial reports. “We focus on investment-related data, looking at how different types of signals impact security practices over different time periods,” said Natividad.

He added: “People will see ChatGPT feedback changing and evolving over time and the data this tool collects. And so is our fund.”

According to Jessica Rabe, founder of DataTrek Research, AIEQ has struggled to find fast-growing companies, and often it only works well during bull markets and tech companies evolve. Perhaps this is why ChatGPT only gives general advice that any investment should be made after thorough market analysis.

Reference: Business Insider

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Source : Genk