The AI Powered Equity ETF (AIEQ US) is celebrating its first anniversary following its launch on NYSE Arca in October 2017.
AIEQ is the first and only actively managed ETF to utilize AI as a method for stock selection.
Brought to market through a partnership between artificial intelligence (AI) specialist EquBot and white-label ETF platform ETF Managers Group (ETFMG), AIEQ is the first and only actively managed ETF to utilize AI as a method for stock selection.
Built on EquBot’s proprietary algorithms, the fund utilizes the cognitive and data processing powers of IBM Watson, the technology company’s AI engine, to analyse US-listed investment opportunities.
EquBots’s approach ranks securities based on their probability of benefiting from current economic conditions, trends, and world- and company-specific events, and identifies those equities with the greatest potential for appreciation.
The fund’s underlying technology is constantly analysing information for approximately 6000 US-listed stocks, including company management and market sentiment, and processes more than one million regulatory filings, quarterly results releases, news articles and social media posts every day. The fund’s portfolio is typically expected to consist of between 30 and 70 equities with high opportunities for long-term capital appreciation.
“With AIEQ, we set out to do something brand new in bringing our AI-powered approach to the world of ETFs,” says CEO and co-Founder of EquBot, Chida Khatua. “One year later, we couldn’t be happier with the market’s reception to our ideas and we’re excited to be at the forefront of the increasing use of AI in investment management.”
“The AI technology behind AIEQ is still in its infancy,” added COO and co-Founder of EquBot, Art Amador. “Our system has grown significantly within the past year in terms of the amount of data processed and the number of investment insights uncovered. In short, our investors are better positioned today than yesterday with the power of machine learning.”
AIEQ’s innovative approach has stirred interest from investors with assets under management in the fund currently around the $190 million mark. The strategy has also performed well over the past year, returning 8.9% to 19 October 2018. In contrast, the S&P 500 Index is up 8.1% over the same period.
“As a leading thematic ETF Issuer, alongside our partners at EquBot, we are proud that in just one year this first to market AI-driven product has attracted significant investor interest as one of the most popular actively managed ETFs of 2018,” said Sam Masucci, CEO, ETF Managers Group. “AIEQ continues to provide an opportunity to access the US domestic market by leveraging the power of machine learning. To date, the model has done a great job of timing, allowing AIEQ to perform even during points of market volatility.”
The fund comes with an expense ratio of 0.75%.
Earlier this year, EquBot introduced the AI Powered Equity ETF (AIIQ US) which acts as a sister fund to AIEQ by focusing the strategy on developed market equities listed outside the US. AIIQ is slightly more expensive with a price tag of 0.79%. The fund has not yet caught the eye of prospective investors with AUM sitting around $5m.