AI-Driven DIP ETF Seeks to Reinvent Active Management

The fund aims to accelerate search for short-term investing opportunities.

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Reviewed by: Zoya Mirza
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Edited by: Zoya Mirza

Newcomer Kaiju ETF Advisors launched an artificial-intelligence-driven exchange-traded fund Tuesday that offers a technical approach to the “buy the dip” trading strategy. 

The BTD Capital Fund (DIP) aims to find "true dips in individual stocks” in nanoseconds, according to the issuer’s press release.  

Kaiju’s ambitious mission? The Chicago-based firm wants to provide investors the benefits of both traditional active management and the speed and efficiency of an AI-computed algorithm.  

“Prior to DIP, this type of technology was only available to accredited and institutional investors in private funds,” Kaiju’s CEO Ryan Pannell told ETF.com. So it packaged its product as an “AI system in an ETF wrapper.” 

DIP will invest primarily in individual U.S. equity securities of large capitalization companies included in the S&P 500 that have been identified by the firm or the “Kaiju Algorithm” as oversold in the market—an evaluation the algorithm makes by applying quantitative methods to a volume of data, according to its prospectus. 

“Really, the algorithm IS the active management. It’s able to evaluate thousands of data per second and look for behaviors we have identified as likely to immediately precede a low-to-high mean reversion in price,” Pannell explained.  

DIP lists on the NYSE Arca and comes with an expense ratio of 1.29%. The fund currently has $250,625 in assets. 

It will be up to investors to decide whether to subscribe to this brand of AI-driven active management. 

 

Contact Zoya Mirza at [email protected] 

Zoya Mirza is a markets reporter at etf.com. Her work has appeared in USA Today, Voice of America, and United Press International, among others. Mirza is a graduate of Northwestern University’s Medill School of Journalism. Her past experiences include editorial work in book publishing and conducting political analysis for NGOs and think tanks. Mirza is a passionate bibliophile and collects vintage postcards from every bookstore she visits in a new city.