AI Managed ETF Funds : What Are The Best?

AI Managed ETF Funds : What Are The Best?

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AI Managed ETF Funds Exchange-traded funds (ETFs) have evolved as a product to the point where investment firms are offering ETFs managed by artificial intelligence technology. Firstly, the three firms offer AI-managed ETFs: QRAFT, Meryln.AI, and Equbot. Secondly, we examined the performance of each of these ETFs to determine the top 5 ETFs with the highest returns year to date. 

QRAFT AI ETFs are a series of funds that invest using AI technology to simplify the alpha research and strategy extraction process with clean data. Moreover, they offer four ETFs: QRFT, AMOM, HDIV, and NVQ. These tickers make up four of the top 5 best performing AI-managed ETFs year to date. These funds had returns of nearly 16 – 20% YTD. 

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Merlyn.AI ETFs are a series of funds that invest using AI and advanced signal processing. Additionally, they offer four ETFs: BOB, DUDE, SNUG, and WIZ. They select momentum plays during bull markets and employ a defensive strategy during bear markets. But, these funds are more conservative as their holdings in each ETF consist of sector ETFs, country ETFs, and bonds. As a result, the returns YTD for each ETF are in the single digits. 

Equbot ETFs are a series of funds that invest using machine learning algorithms, knowledge graphs, and IBM Watson’s natural processing language. Furthermore, they offer two ETFs: AIIQ and AIEQ. The goal of both of these funds is to pick stocks that have the highest probability of price appreciation. The timeframe investing-goal of these funds is 1 year. The only difference between the two is that AIIQ can also hold international stocks. 

1. QRAFT AI-Enhanced US Next Value ETF (NVQ)

Holding 100 stocks in this fund, NVQ invests in U.S. large-cap stocks using AI by applying a value investing strategy. By extracting patterns, it identifies companies with a higher intrinsic value than book value. These are the top 5 holdings along with their weight to the fund: Intel (INTC: 8.07%), Raytheon Technologies (RTX: 6.37%), CVS Health (CVS: 5.21%), Anthem (ANTM: 5.18%), ConocoPhillips (COP: 3.66%). It currently has over $6.2 million in AUM. 

About one-half of its holdings are in consumer discretionary and communication services. The other half are in the following sectors from largest to smallest: financials, industrials, consumer staples, health care, information technology, materials, and energy. 

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2. QRAFT AI-Enhanced US Large Cap Momentum ETF (AMOM)

Holding 50 stocks in this fund, AMOM invests in U.S. large-cap momentum stocks using AI by taking advantage of the movement of existing market trends. Moreover, the AI takes a period in the past (3 to 36 months) that resulted in the best performance in stocks and ranks these stocks by their residual returns. Residual returns are defined by the total return without considering the market, size, and value risks in the context of portfolio management. AMOM also uses the stock management theory, which states that stocks with higher residual returns have the chance to perform better and more consistently than traditional momentum stocks.

Firstly, these are the top 5 holdings along with their weight to the fund: Advanced Micro Devices (AMD: 6.95%), Snapchat (SNAP: 5.27%), Zoom Video Communications (ZM: 5.12%), Idexx Labs (IDXX: 3.63%), Align Technology (ALGN: 3.38%). Secondly, it currently has over $36.7 million in AUM. Thirdly, three-fourths of its holdings are in technology and consumer cyclicals. The rest are in the following sectors from largest to smallest: consumer non-cyclical, healthcare, industrials, and energy.  

3. AI Powered Equity ETF (AIEQ) 

Holding 139 stocks in this fund, AIEQ invests in U.S. stocks using IBM Watson. Moreover, the AI builds predictive models for 6,000 companies and breaks down each company into four deep learning models: financial, news and information, management, and macro. Each of these models have many different signals and then assign a score for the company. The top companies (150 max) are then included in this fund. 

These are the top 5 holdings along with their weight to the fund: Danaher (DHR: 3.54%), Alphabet (GOOGL: 3.06%), Dexcom (DXCM: 2.66%), Autozone (AZO: 2.57%), Rapid7 (RPD: 2.13%). In addition, it currently has nearly $167 million in AUM. About 80% of its holdings are in technology, consumer cyclicals, and health care. The rest are in industrials, financials, consumer non-cyclical, energy, telecommunications, utilities, and basic materials. 

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4. QRAFT AI-Enhanced US High Dividend ETF (HDIV) 

Holding 100 stocks in this fund, HDIV invests in high dividend-yielding stocks using AI based on short-term price returns. And the AI chooses the top 150 stocks. As the Ai uses a formula that is based on dividend yield and dividend growth. And from the 150, the AI chooses the top 100 stocks by taking the average of the distributions of each stock’s relative price growth. But, this particular fund rebalances its holdings frequently. And the fund will buy and sell shares frequently.

These are the top 5 holdings along with their weight to the fund: Johnson & Johnson (JNJ: 6.37%), Walmart (WMT: 5.71%), Home Depot (HD: 4.94%), Procter & Gamble (PG: 4.86%), Adobe (ADBE: 4.21%). It currently has $7.8 million in AUM. This fund is one of the more diversified ones that QRAFT offers. And three-quarters of its holdings are almost evenly split between financials, consumer discretionary, health care, energy, and consumer staples. But, the other third is split among materials, industrials, and communication services.

5. QRAFT AI-Enhanced Large Cap ETF (QRFT)

Holding 350 stocks in this fund, QRFT invests in U.S. large-cap stocks using AI. This fund identifies 300 – 350 stocks that have the potential to outperform their peers over the next three-month period. Moreover, the fund uses five main factors: quality (based on profitability), size (based on market cap), value (based on P/B), momentum, and volatility. But, the AI does this monthly, thus this fund expects to buy and sell securities frequently. 

Inconclusion, as these are the top 5 holdings along with their weight to the fund: Microsoft (MSFT: 3.10%), Apple (AAPL: 2.81%), Amazon (AMZN: 2.60%), Advanced Micro Devices (AMD: 2.15%), Alphabet Class A (GOOGL: 1.97%). Furthermore, it currently has nearly $22 million in AUM. About 70% of its holdings are in technology and healthcare. Lastly, the rest from largest to smallest are in consumer cyclicals, financials, industrials, consumer non-cyclicals, energy, basic materials, telecommunications, and utilities. 

AI Managed ETF Funds Written by Jay Devon

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