EquBot launches AI-driven ETF targeting international equity markets

Jun 11th, 2018 | By | Category: Equities

EquBot has launched the actively managed AI Powered International Equity ETF (AIIQ US) on NYSE Arca.

Equbot has launched the actively managed AI Powered International Equity ETF (AIIQ US) on NYSE Arca.

Equbot has launched the actively managed AI Powered International Equity ETF (AIIQ US) on NYSE Arca.

AIIQ focuses on equity securities in companies located in developed markets outside the US, with its stock selection decisions guided by artificial intelligence.

The fund is a sister to the firm’s existing AI Powered Equity ETF (AIEQ US)—launched on NYSE Arca in October last year—which focuses on US companies only.

Thus far, AIEQ, which has a total expense ratio (TER) of 0.75% and trades in US dollars, has grown to around $140 million in assets under management. AIIQ has a TER of 0.79% and also trades in dollars.

“In considering the next iteration of our AI-driven investment approach, expanding the focus to include all of the developed markets outside of the US was the next logical step. We are very excited to be bringing AIIQ to market and furthering the use of AI in powering investor’s portfolios.”

– Chida Khutra, chief executive officer and co-founder of Equbot.

AIIQ’s managers choose securities based on the “EquBot model”—a proprietary, quantitative, AI-driven model, which runs on IBM’s Watson platform.

Each day, the EquBot model ranks thousands of stocks based on the probability of each company benefiting from current economic conditions, trends and world events, and identifies between 80 and 250 companies for inclusion in the portfolio that have the greatest potential for price appreciation over the next twelve months.

EquBot’s technology is driven by its proprietary algorithms, which operate across multiple AI cognitive computing platforms. In asset management and portfolio construction, EquBot’s technology combines both fundamental and qualitative analysis while formulating new investment insights through the use of AI, utilizing massive amounts of data to build predictive financial models on more than 15,000 publicly traded companies in the US and in international developed markets.

Khutra added, “In order to fully understand the factors impacting an individual equity, you must be able to locate, synthesize and analyze thousands, sometimes millions, of pieces of data. Clearly, there is no way an analyst or even a team of analysts could process that much information in a timely manner. That is where the power of AI comes into the equation. As the volume of data explodes, the need for powerful, quantitative, objective analysis grows, particularly when building a portfolio of equities from developed markets around the world. We’re very pleased to be bringing our latest ETF to market, and we look forward to delivering additional innovative AI-powered solutions across the investment landscape.”

AIIQ employs a volatility screen, with a goal of maintaining portfolio volatility comparable to that of the broader developed markets excluding the US. The fund covers companies of all sizes by market capitalization, and the weight of any individual company in the underlying portfolio is capped at 10%.

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