ChatGPT outperforming the top 10 most popular funds in the UK

Have you seen this?

What is the prompt according to you?
What are the criteria they use?
How many trades do you think they make every day?

Never mind the prompt and criteria: Looks like Chat GPT only selected stocks that are major index components and also the “strongest” large cap stocks in each industry. Essentially the household names. That’s a pretty conservative bet and not a mind-boggling introduction AI’s promise. ChatGPT invested in the stocks my grandmother might have bought with her tax refund. Basically solid, high quality “boring” stocks. You don’t need ChatGPT to tell you to do your long term investments that way.

Also look at the period. It presumably falls somewhere in the March 6th to May 1 time frame, during which the overall market initially fell, only to recover and surpass the levels at the beginning of the period. So a gain of a few percentage points is hardly surprising, especially since the “fund” was equal weight and thus probably not re-balanced for purposes of risk management, which can cause a mutual fund to lag the overall market in the short term.

Trades per day: The “fund” apparently has 38 components and names 39 stocks. This suggests that it hardly traded at all. Maybe something stopped out and was replaced? If it had actively traded that portfolio once a day it should have ended up doing better than a few percent.

I have used AI/ML in trading for the better part of a decade. The strength of such technologies is that they can detect trends, patterns and levels that are difficult for a human to detect and profit from. “Buy quality stocks” hardly falls into that category, it’s just plain common sense. So no, I woudln’t use ChatGPT for trading.