Can ChatGPT improve investment decisions? From a portfolio management perspective

Hyungjin Ko and Jaewook Lee

Finance Research Letters, 2024, vol. 64, issue C

Abstract: We examine ChatGPT, a prominent Large Language Model (LLM), in supporting portfolio management with a focus on asset selection and diversification through quantitative methods. We use ChatGPT to select assets from various asset classes and evaluate the diversification effect of its selections. Our results suggest that ChatGPT’s selections are statistically significantly better in diversity index than randomly selected assets. We also construct portfolios based on ChatGPT’s selections and find that they outperform portfolios built on randomly selected assets. Overall, our study contributes to a better understanding of the role of LLMs like ChatGPT as potential assistants for portfolio managers.

Keywords: ChatGPT; Large Language Model; LLM; Asset selection; Portfolio management; Diversification effect; Investment; FinTech (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:64:y:2024:i:c:s154461232400463x

DOI: 10.1016/j.frl.2024.105433

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