AI Stock ETF Rocketing
ChatGPT, the well-known language bot, has demonstrated remarkable human-like capabilities in generating articles, emails, and even dating app messages. However, when it comes to creating a portfolio that outperforms the market, it only provides generic information and reminds users that it doesn’t have real-time stock data.
On the other hand, the AI Powered Equity ETF (AIEQ), with assets worth $102 million, is successfully fulfilling that request in 2023. Launched in 2017 by ETF Managers Group in partnership with the fintech company Equbot, the fund relies on IBM’s Watson supercomputer to manage its portfolio.
The 114-holding portfolio, which is managed actively, has seen a 10.4% increase in 2023 so far, whereas the Vanguard Total Stock Market ETF has only seen a 5% increase over the same period. Although the actively managed fund has outperformed the benchmark fund, it also comes with a higher cost. The AI-powered ETF has a fee of 0.75% compared to Vanguard’s fee of 0.03%. Both portfolios hold JPMorgan and UnitedHealth Group among their top-10 holdings.
According to ETF.com, Equbot’s Chief Investment Officer, Chris Natividad, stated that the Watson-powered fund can analyze information from sources beyond standard market data, such as tweets and earnings calls. The fund is focused on using data to understand the impact of different signals on security practices over various time frames.
Natividad believes that the best is yet to come for the fund and it will continue to improve and evolve with time and data, just like OpenAI’s ChatGPT. In fact, OpenAI recently received a $10 billion investment from Microsoft and its technology is making a significant impact across various industries. BuzzFeed plans to use the technology to create content, while educators are raising concerns about its implications in schools. The chipmaking industry is also poised to benefit from the technology’s advancements.