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Robots Rule This ETF

October 19, 2017 11:32 am
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In the technology space, artificial intelligence and machine learning are widely viewed as major growth frontiers. Those themes power the newly minted AI Powered Equity ETF (NYSE:AIEQ), which debuted Wednesday.

The AI Powered Equity ETF was launched by EquBot LLC, in partnership with ETF Managers Group (ETFMG). AIEQ is powered by International Business Machines Corp. (NYSE:IBM)'s Watson. The new ETF is actively managed. AIEQ is the second ETF powered by artificial intelligence in its investment process, following the debut of BUZ in 2016.

“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,” according to a statement. “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.”

Current Roster

AIEQ debuted with 65 holdings. The new ETF's top 10 holdings combine for over 40 percent of the fund's weight.

AIEQ's top 10 holdings include S&P Global Inc (NYSE:SPGI), Genworth Financial Inc (NYSE:GNW), Boyd Gaming Corporation (NYSE:BYD) and HCA Healthcare Inc (NYSE:HCA).

“In the case of AIEQ, the fund’s underlying technology is constantly analyzing information for approximately 6,000 U.S.-listed equities, 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,” according to the statement.

A Diverse Approach

The AI Powered Equity ETF is not constrained in terms of market value and can hold stocks of any market capitalization.

“Active management that combines fundamental, technical, and proprietary investment efficiency analysis to identify companies with high opportunities for long-term growth,” according to EquBot. “Artificial intelligence and machine learning capabilities continually build upon the financial knowledge base driving an investment system that perpetually grows in value.”

AIEQ charges 0.75 percent per year, or $75 on a $10,000 investment.

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