ETF of the Week: OAIA

“We can’t help but keep hearing about artificial intelligence, machine learning, and how it’s working its way into our everyday lives. It’s also working its way into ETFs, and here’s a great example,” Lydon said.

Agricultural commodities have largely performed well in the past couple of years, supported by high levels of inflation. However, agricultural commodities don’t all perform the same way; often, some agricultural commodities perform well while others lag.

Lydon said that OAIA’s underlying index uses artificial intelligence to analyze global data and assess why certain areas or agricultural products are or are not doing well, creating data for the index to use to best position itself.

“Once that data is retrieved, automatically, this index will buy futures, either long or short, based on the artificial intelligence received,” Lydon said. “The AiLA group that’s behind it has done a really good job with these types of strategies and indexes in the past. They have recently partnered with Teucrium to bring their strategy to market in the form of ETFs.”

Agriculture has been a great diversifier over the past couple of years, helping advisors navigate volatility in portfolios.

“Anything alternative-oriented pretty much has done well compared to stocks and bonds in the last couple of years,” Lydon said. “With that in mind… wouldn’t it be great if you had some type of control… on your alternative allocation? That’s what this provides. It’s never 100% long or 100% short, there’s a little bit of a balance. All that balance is based on real data, not just data that happened a month ago or six months ago, but data that happened today.”

“When you start looking at artificial intelligence and how it’s going to continue to make its way into our portfolios, this makes a heck of a lot of sense, especially as more and more people are looking at alternative strategies,” Lydon added.

For more news, information, and analysis, visit the Commodities Channel.