The Qraft AI-Enhanced US Large Cap Momentum ETF AMOM, an exchange-traded fund driven by artificial intelligence, has acquired new stakes in Tesla Inc. TSLA, Netflix Inc. NFLX and Autodesk Inc. ADSK, while entirely divesting its holdings in Intel Corp. INTC, PayPal Holdings Inc. PYPL and Moderna Inc. MRNA.
What Happened: The ETF’s latest portfolio after rebalancing in early December showed that it has also entirely divested its holdings in technology company International Business Machines Corp. IBM and oil giant ConocoPhillips COP.
The ETF, which has assets under management of $27.07 million, has a history of accurately predicting the price movements of Tesla’s shares.
The fund now has electric vehicle maker Tesla as its largest investment with a 7.7% weighting, followed by streaming giant Netflix with a weighting of 6.8% and biotechnology firm Merck & Co. Inc. MRK with 5.1% weighting.
The other two stocks that make up the top five holdings in the AMOM portfolio are software company Autodesk with a 2.5% weighting and glucose monitoring systems maker DexCom Inc. DXCM with 2.4%.
Prior to the rebalancing, the ETF had Intel, PayPal, Moderna, IBM and ConocoPhillips as its five largest holdings.
Why It Matters: AMOM, a product of South Korea-based fintech group Qraft, tracks 50 large-cap U.S. stocks and reweighs its holdings each month.
AMOM has delivered year-to-date returns of 8.99%, compared to its benchmark — the Invesco S&P 500 Momentum ETF SPMO – which has returned 20.29% so far this year.
The fund’s latest rebalancing shows it is now bullish on Tesla, Netflix and Merck.
Tesla reported better-than-expected earnings results as well as record vehicle production and deliveries for the third quarter in October.
The EV maker has several products in its pipeline including the Cybertruck, the Semi truck and the next-generation Roadster. Additionally, the Elon Musk-led company is close to commencing production at its Giga Berlin and Giga Texas.
Netflix also reported better-than-expected earnings for the third quarter in October. The streaming giant, which has more than 200 million subscribers, officially launched its mobile games business last month after having hinted about its foray into the segment earlier this year.
Merck is expected to benefit from demand for its antiviral drug amid the pandemic. In November, UK regulators approved Merck and Ridgeback Biotherapeutics' Molnupiravir for COVID-19, marking the first oral antiviral medicine authorized to treat mild-to-moderate symptoms.
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