Not sure which investments to pick? Let AI help…

EasyEquities has launched an interactive AI-generated basket function to help investors select stocks in industries they’re interested in supporting.

In the investing space, AI can be a useful and powerful tool. The ability to analyse vast amounts of data quickly and identify patterns that humans might overlook, is just one way AI can play a supporting role in your investment journey.

EasyEquities has taken that a step further. The online investing platform has launched AI functionality that allows users to generate their own investment portfolios called “baskets”, based on a theme or description of what they want to invest in.

This adds to the managed investments already on offer on EasyEquities, a concept driven by their community who were looking for ways to flexibly combine DIY and managed investment options. These products provide investors with expertly constructed ready-made portfolios, called “bundles”, by asset managers. There has been good uptake in bundles, with many investors wanting some portion of their portfolio managed. Currently there are over 32 000 people who have invested R498 million in managed bundles. The new AI basket functionality is an extension of this product suite.   

It also offers an interactive educational experience, giving users the opportunity to engage with an AI-powered chatbot to learn more about the selection of companies picked for any particular basket and why they have been selected. In other words: You choose the theme, AI does the homework.

“This enables anyone to turn their ideas or interests into a flexible basket of stocks to invest in,” says EasyEquities chief product officer, Almero Oosthuizen. “The EasyEquities AI baskets allow users to prompt our AI engine with themes and ideas that can be translated into actionable investment opportunities. AI can scan vast amounts of data, identifying trends, relationships and potential opportunities that humans might miss. This can inspire new investment ideas beyond your usual scope.”

The project has been a collaboration between EasyEquities and Telescope AI, a leading API provider enabling publishers, brokers and fund managers to leverage AI for finance. Telescope has partnered with a number of international brokers and fintech companies, but EasyEquities is the first to launch publicly in the African market.

Luc Pettett, founder and CEO of Telescope, says: “When we started prototyping this technology in 2023, investors were limited to basic concepts like ‘electric vehicles’ for building meaningful portfolios. Today, thanks to rapid advancements in large language models (LLMs), the launch of AI baskets is at the forefront of innovation. AI baskets address a fundamental challenge for investors: efficiently searching through thousands of stocks that align with their ideas, no matter how nuanced or forward-thinking they may be.”

Almero also sees this as another way to lower investment barriers and support investor education.

“AI baskets are another tool we’ve developed to streamline the investment exploration process and support investor education. They enable investors to efficiently search for investment options based on their criteria and interact with an AI chatbot for added information. This, combined with our existing educational resources, enables investors to expand their knowledge base as they consider their investment journey.”

Luc adds that the AI baskets will help combat “investor paralysis”, which he has experienced himself.

“Sometimes you believe in an idea, but spending hours on Google trying to find stocks is very overwhelming. Perhaps you like a theme such as ‘electric vehicles’, but you irrationally only pick the vehicle manufacturers; you don’t know about the other beneficiaries. AI baskets help investors filter through this complex problem, and the investor has the ultimate choice on what they want to buy.”

Luc adds how important it has been to ensure that the AI system is safe. It has been programmed to filter out inappropriate content and in no way give financial advice.

“We’ve put significant work into developing guardrails at Telescope. Our systems are benchmarked across thousands of prompts to ensure they do not provide personal or subjective advice and are capable of rejecting inappropriate investment ideas. We’re committed to providing investors with reliable and compliant information,” he explains.

The inclusion of AI in the EasyEquities universe is not for the purpose of advice. Rather, it serves as an additional education resource alongside other initiatives like The Easy Blog, where research and educational content is shared regularly; or the EasyAcademy, which provides courses and tutorials on various aspects of investing.

The team had a lot of fun testing this feature. Even with the most arbitrary prompts, the AI engine was able to create an investment case with a selection of relevant stocks. When prompted with the description “potato chips” it was able to create a basket with relevant companies in the potato chip industry. This was the description it gave:

Potato chips are a staple snack food in the United States, with the average American consuming around 6 pounds per year. As health trends drive demand for better-for-you snacks, this presents an opportunity for companies innovating in the potato chip space with offerings like baked chips, veggie chips and chips made from alternative vegetables. Companies able to capture shifting consumer preferences stand to gain market share in a $22 billion market. Investors should target companies leveraging proprietary technologies or capabilities in order to produce potato chips that deliver on taste while improving nutritional profiles. Chip manufacturers with strong brand equity and distribution have upside if they can translate their brand strength into better-for-you offerings. Emerging brands focused exclusively on healthier chips also warrant consideration, though their smaller scale makes growth tougher. The keys will be taste, health profile, and brand trust – companies able to deliver on all three will be best positioned to capitalize on rising demand for better snacks.

When a basket is generated, you are presented with an equally weighted list of stocks, but you also have the option to adjust your investment based on market capitalisation. This means that the investment can be proportionally distributed according to the market share held by each company, ensuring a diversified and market-size adjusted portfolio.

You can exclude certain stocks from this list too, with the AI updating the provided growth graphs in real time. These graphs serve as a visual aid to gauge potential investment performance. Moreover, the platform enriches the decision-making process by supplying a feed of real-time news articles. This feature allows you to become more acquainted with the companies in the list and to stay informed on current events and developments in the market.

The launch of AI baskets on the EasyEquities platform forms part of EasyEquities’ ethos to design new products and features based on the needs of their growing community, consisting of over two million investors.

“Our product portfolio is expanding and is often driven by customer demand. With new introductions like EasyCredit, EasyProtect, and EasyBonds, we’re leading the charge in redefining what’s possible in our industry and our clients’ lives. These aren’t just products; they’re gateways to new experiences and opportunities for our users,” says Charles Savage, CEO of EasyEquities.