Article by Phil
Artificial Intelligence (AI) market leader Chat GPT has created an Investment Planner fund.
In a supposedly theoretical exercise, the AI software instructed by www.finder.com has picked out 38 companies to invest in. So far so good, with the fund up by almost 5% in the first eight weeks. Seems they’ve kept it simple with companies like Facebook (Meta) and Microsoft, both of whom are currently up.
But will people follow an AI investment Planner fund manager? Current research suggests that:
- 20% would consider it
- And almost 10% are already following it!
- 35% said they would not us it.
- But almost 40% didn’t what AI was anyway.
- Not surprisingly, the younger the respondents, the more likely they were to say they would use the system. Less than 5% of over 60’s would use it.
What is it that concerns investment clients most at the moment? The latest survey by Canada Life Found that:
- 83% of clients were concerned about inflation.
- 68% were worried about the fluctuating value of their investments (especially downwards).
- 37% about the threat of a recession and
- Only 25% were worried about the latest tax increases.
This had led to over 50% of investors re-considering their investments overall, according to Charles Schwab.
By contrast. The latest figures from the Investment Association show that the inflow of investment funds topped £2 billion in April. The highest figure so far this year. At the same time net outflows of investment funds also fell below £1 billion for the first time in months.
All areas of investment saw growth. From equity investments to corporate bonds to ISA’s.
30% of investments were made through financial advisers but over 40% direct into platforms.
But ESG investments are facing a down turn. Research by Charles Schwab showed that two thirds of savers were now more concerned about their investment returns, than about their ESG credentials. Back in 2021 over 50% said that ESG was their biggest concern. This highlights how moods can change. Especially where ESG may be seen to be costing money at a time when inflation is high. This is most common in the older generation, with less than 25% concerned about ESG matters.
In other news. It looks like investors in the failed Woodford investment fund are likely to get a bonus. In the sense that they are likely to receiver some funds.
The FCA has announced that it expects to recover £235 million on behalf of investors. The money is coming from Link Fund Solutions (LFS) who were Investment Planner fund manager and who the FCA says are responsible for the losses. This is because of their failure to properly manage the funds liquidity.
£47 million will come from LFS own cash. £48 million from its insurance cover. Plus, an estimated £160 million from the sale of the LFS business. This is of course an assumption as no sale has yet been agreed. There may be more money to come if LFS parent company makes further contributions.
£235 million would mean that investors recovered 77 pence in the pound. Not a bad result to say they could have lost everything.
