AI-driven asset management fintech start-up Akros Technologies announced that it has become the first company to list an AI-driven target income ETF with monthly distributions on the NYSE.
The listed income ETF is the Akros Monthly Payout ETF (NYSEArca: MPAY), which aims for monthly distributions at an annualized target rate of 7%. The distributions of the ETF are comparable in essence to stock dividends such that MPAY can serve as a viable investment option for those who are looking for a new source of passive income and those looking to save for retirement. The ETF benchmarks the Akros Multi-Asset Index, which the company developed last month without options and leverage.
Prior to the listing of MPAY, Akros has launched two indexes with administrative services provided by Morningstar Indexes. The two indexes that Akros has developed are the Akros Multi-Asset Index and the Akros Total Stock Market Index. The indexes have been implemented using Akros’ proprietary data infrastructure and distributed computing environment that process over 10TB of point-in-time data dating from 1910 as well as AI models that have been trained at a level comparable to those used at global quantitative hedge funds.
The Akros Multi-Asset Index tracks the performance of a dynamically allocated portfolio diversified across 19 different asset types to represent the target rate that corresponds to an annualized monthly payout of approximately 7%. In contrast to the S&P 500, the Akros Multi-Asset Index, which is designed to represent a portfolio which minimizes the impact of external factors affecting the market, recorded comparatively high stability by recording a small decline during the 2020 global stock market crash. Since the inception of the index to date, the portfolio representation of MPAY fulfilled an annualized target rate of 7% and simultaneously recorded an average annual return exceeding the inflation rate to represent stable cash flow with capital appreciation.
The Akros Total Stock Market Index, meanwhile, tracks the performance of a concentrated portfolio of 50 U.S. stocks with market capitalization greater than $1 billion that targets expected annualized return in the high teens. The index represents a portfolio that seeks to maximize capital gain. The represented portfolio accordingly recorded a profit during the 2018 U.S.-China trade war when the volatility was high and has outperformed the portfolio tracked by the S&P 500 every year since the inception of the Akros Total Stock Market Index. Akros’ second ETF that benchmarks the Akros Total Stock Market Index is on schedule to be listed on the NYSE in the second half of 2022.
Co-founder and CEO Kyle Moon said in a news release: “Akros has verified the operation and tested the performance through the launch of the indexes and in the case of the ETF that benchmarks the Akros Multi-Asset Index, it will be the first AI-driven target income ETF to have listed at the NYSE to adopt the monthly payout policy at the given target rate.”
Moon added: “Despite the increase in the base rate, savings for retirement remains unattractive due to a low deposit rate at around one percent. Whereas real estate investment provides an average annual rental yield of approximately two to four percent, liquidity is low and vacancy risk is high. Akros seeks to provide an effective investment solution for those looking for alternatives.”
Consequently, Akros ultimately aims to transform the existing notion that “investing is difficult” by focusing on the cores of investment, which the company simplifies down to income maximization and capital maximization. The company seeks to meet consumer needs by listing the two ETFs that focus on these goals. Akros is expected to back these ETFs with its own capital investment and take internal compliance measures that only permit employees’ U.S. stock investments to Akros’ ETFs to remove any potential conflict of interests.
Under the mission of “engineering disruptive finance,” Akros develops data-driven financial technologies to develop globally scalable investment products. Founded in 2021, Akros is spearheaded by the experienced trio Kyle Moon, Jin Chung, and Justin Gim. As the previous head of AI research and CSO of Qraft Technologies, Moon has the experience of listing and managing four ETFs on the NYSE using a deep learning-based system. While Chung has previously researched the application of Bayesian deep learning in autonomous driving at the Oxford Robotics Institute, Gim has over nine years of experience in the asset management industry.
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