Two new artificial intelligence ETFs launched on the New York Stock Exchange on Tuesday via a partnership between Exchange Traded Concepts and Qraft Technologies.
The pair of ETFs are the Qraft AI Enhanced U.S. Large-Cap ETF (NYSEArca: QRFT) and the Qraft AI Enhanced U.S. Large Cap Momentum ETF (NYSEArca: AMOM).
Hyung-Sik Kim, CEO and co-founder of Qraft Technologies, said they have been working together with ETC to improve the performance of traditional quantitative investment strategies by applying AI technologies.
“As our system is ready to compete in the heart of the global financial market, we feel happy but also feel a sense of responsibility for proving AI’s capabilities in the financial market,” Kim said. “In the future, we expect AI-enhanced products have the potential to become substitutes for broad market indices if we prove it with our technologies. I would like to thank everyone at Qraft and ETC for their hard work.”
QRFT seeks to provide dynamic exposure to five main factors affecting the U.S. stock market, namely, quality, size, valuation, momentum, and low risk. Certain causes or conditions may affect the returns to these basic investment factors. To create optimal factor weights, the fund utilizes artificial intelligence (AI) technologies to continuously learn the correlation of factor returns with various macroeconomic and valuation conditions. Artificial Intelligence may be able to identify data patterns that are not readily discernable to humans and to continuously learn the correlation of factors to these causes or conditions. The investment system returns stock weights that are in line with the targeted factor weights for the portfolio.
Meanwhile, AMOM is an actively managed exchange-traded fund which aims to provide investors with long-term capital appreciation by utilizing a proprietary artificial intelligence system to select large-capitalization U.S. stocks with exposure to the momentum factor. The fund utilizes artificial intelligence to determine how a company’s momentum over a certain period would change and/or affect the company’s performance over time and recommends a weighting of such company based on its potential for maximum return as compared to other companies.
J. Garrett Stevens, CEO of Exchange Traded Concepts, said they were thrilled to be working with the Qraft Technologies team to bring this timely and innovative fund to market.
“These funds are actively managed by the AI system AQUA which was developed by Qraft Technologies,” Stevens said. “Great colleagues and great ideas are the true drivers of ETF success. We’re very pleased to add Qraft Technologies and QRFT & AMOM to our growing list of partners and innovative ETF solutions.”
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