Some new exchange traded funds focusing on niche investment concepts struggle to attract investors attention and assets while others flourish. The newly minted AI Powered Equity ETF (NYSE Arca: AIEQ) belongs in the latter category.
AIEQ, which debuted in mid-October, is off to a solid start. AIEQ is an active ETF built on EquBot’s proprietary algorithms, utilizing the cognitive and big data processing abilities of IBM Watson™ to analyze U.S.-listed investment opportunities.
“The fund’s software ‘constantly’ analyzes information for roughly 6,000 U.S.-listed stocks, according to the company, scanning through regulatory filings, news articles, social media posts, and traditional financial metrics—including factors pertaining to correlations and valuations—to find investments it perceives as undervalued. Daily turnover is high compared with other actively managed funds, EquBot said,” reports MarketWatch.
Home to 70 stocks, AIEQ had nearly $73 million in assets under management as of Dec. 5th, an impressive feat for an ETF that is less than two months old.
None of the ETF’s holdings account for more than 4.4% of its weight. Top 10 holdings in AIEQ include Nasdaq Inc. (NASDAQ: NDAQ), Nvidia Corp. (NASDAQ: NVDA), Capital One (NYSE: COF) and Dana Inc. (NYSE: DAN).
AIEQ “was launched in October, and only four other funds launched then (or subsequently) have amassed more in assets, according to data from research-firm XTF. Of the 246 funds that have been launched in 2017 through November, only 32 are larger, and most of those have also benefited from the more established distribution networks of their sponsors, which include names like Charles Schwab,” according to MarketWatch.
EquBot’s approach ranks investment opportunities 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. EquBot and ETFMG expect the fund’s portfolio to typically consist of 30 to 70 of U.S. equities only and volatility comparable to the broader U.S. equity market.
AIEQ’s asset-gathering acumen is all the more impressive when considering its annual expense ratio of 0.75%, or $75 on a $10,000 investment. That is well above the average fee for a large-cap equity ETF. Additionally, investors have been overtly favoring ETFs with expense ratios of 0.2% or less this year, a trend that is widely expected to continue.
For more information on new fund products, visit our new ETFs category.