The model also includes a volatility screen with the goal of maintaining portfolio volatility that mimics the broader developed markets outside of the United States. As the trade war between the U.S. and China escalates, the AI-driven model could be the best defense for investors looking abroad for international opportunities.
“We are continually processing global data so trade war information and corresponding market moves definitely impacted the model during Q3,” said Amador. “When these global market events occur we feel AI is the best tool to process the information and make portfolio changes in an unbiased manner. While trade war developments in aggregate were headwinds for international markets in Q3 we are encouraged by the amount of data being processed (over 1.2M articles daily) and the resulting decisions by our platform to drive leading results. At a high level, we continue our optimism in the ongoing development of AIIQ as there is, “more data, more companies, and more opportunities for us to uncover.”
Can AI-Driven Model Work in Emerging Markets?
The pain in emerging markets has been evident in ETFs, such as the Vanguard FTSE Emerging Markets ETF (NYSEArca: VWO)–down 7.67% YTD, iShares Core MSCI Emerging Markets ETF (NYSEArca: IEMG)–down 7.3% YTD and iShares MSCI Emerging Markets ETF (NYSEArca: EEM)–down 7.78% YTD. With respect to value compared to price, many of these ETFs from emerging markets present a profitable opportunity that can be realized–possibly through AI.
It’s certainly a potential space where an AI-driven model like EquBot’s could possibly ferret out unprofitable opportunities and supplant them with investments that have better growth potential. It presents an interesting opportunity for the investor who is seeking value in terms of locating discounted assets, particularly with the help of AI technology.
“Our coverage universe continues to grow with time and the machine learning processes unique to our system,” said Amador. “The EquBot platform is already capturing information related to the EM space. We will continue to monitor the development of electronic data in these regions as well as investor demand for specific EM products.”
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