South Korean artificial intelligence (AI) firm Qraft Technologies has launched two actively managed ETFs in the US that deploy AI to continuously sharpen their exposure to selected factors.
Hyung-Sik Kim, CEO and co-Founder of Qraft Technologies.
The funds, which are listed on NYSE Arca with expense ratios of 0.75%, have been brought to market in partnership with white-label ETF platform Exchange Traded Concepts.
The Qraft AI Enhanced US Large-Cap ETF (QRFT US) provides dynamic exposure to five factor risk premia within the US large-cap equity market: Quality, size, valuation, momentum, and low risk.
The fund uses Qraft’s proprietary AI Quantitative Investment System known as AQUA to constantly evaluate the correlation of factor returns with various macroeconomic and valuation conditions. The portfolio will consist of between 300 and 350 stocks.
Qraft’s second launch is the QRAFT AI Enhanced US Large Cap Momentum ETF (AMOM US) which also focuses on the US large-cap universe. The fund, which typically holds around 50 constituents, uses AQUA to determine how a stock’s price momentum might change over a certain period.
Both funds select and weight their securities with reference to target portfolios created by AQUA that seek to maximize returns while adhering to risk constraints.
Hyung-Sik Kim, CEO and co-Founder of Qraft Technologies, commented, “We have been working together with Exchange Traded Concepts to improve the performance of traditional quantitative investment strategies by applying AI technologies. As our system is ready to compete in the heart of the global financial market, we feel happy but also a sense of responsibility for proving AI’s capabilities in the financial market. In the future, we expect AI-enhanced products have the potential to become substitutes for broad market indices.”
Garrett Stevens, CEO of Exchange Traded Concepts, added, “We are thrilled to be working with the Qraft Technologies team to bring this timely and innovative fund to market. These funds are actively managed by the AI system AQUA which was developed by Qraft Technologies. Great colleagues and great ideas are the true drivers of ETF success. We’re very pleased to add Qraft Technologies and QRFT & AMOM to our growing list of partners and innovative ETF solutions.”
Investors particularly interested in AI-driven strategies might also wish to look at the AI Powered Equity ETF (AIEQ US), devised by AI investment specialists EquBot. This US large-cap equity fund typically holds between 30 and 70 securities based on EquBot’s proprietary algorithms, utilizing the cognitive and data processing powers of IBM Watson. Its approach ranks equities based on their potential for appreciation based on current economic conditions, trends, and world- and company-specific events. AIEQ comes with an expense ratio of 0.75% and has over $130 million in AUM.