The First ETF Constructed with IBM Watson Artificial Intelligence Arrives

Artificial Intelligence

We get that FintekNews talks about some fairly esoteric concepts in the world of financial technology, but now we’re talking ETFs, and EVERYBODY understands those.  So why does this story fall under financial technology?  Because the portfolio of this new ETF utilizes IBM Watson artificial intelligence, which according to the firm’s founder, is far superior to other algorithmic strategies currently being utilized by hedge funds and prop trading operations.  Since the ETF just launched on October 18th, the track record is certainly not long enough to validate long term returns, but according to the Business Insider piece below, it is generating double the S&P 500 returns thus far.  One to watch.
(Cindy Taylor/Publisher)


“…A new artificial intelligence-powered exchange-traded fund launched on October 18. Called the AI Powered Equity ETF (ticker: AIEQ), it uses IBM‘s Watson supercomputing technology to analyze more data than humanly possible, all in the pursuit of building the perfect portfolio of 30 to 70 stocks.

The ETF ranks investments based on their “probability of benefiting from current economic conditions, trends, and world- and company-specific events” and picks those with the best chance at outperformance, according to a recent release.

And the technology enables it to do that while constantly analyzing information for 6,000 US-listed companies. The top three positions as of Friday were CIT Group, Penumbra and Genworth Financial.

…So what sets AIEQ apart? Chida Khatua, CEO and co-founder of EquBot, argues that their technology is more advanced, which gives it a big advantage.

“As powerful as many algorithms underlying expensive quantitative hedge funds and other vehicles might be, unless they’re also built with AI and machine learning baked right in, mistakes can be propogated and opportunities for outperformance can be missed,” he said in the October 18 release”…

Full Story at BusinessInsider