New Active ETFs Run With AI

Exchange Traded Concepts has ushered two funds into the market that are run using artificial intelligence.

Reviewed by: Heather Bell
Edited by: Heather Bell

A newcomer to the ETF space has launched two artificial-intelligence-based funds through Exchange Traded Concepts. The Qraft AI-Enhanced U.S. Large-Cap ETF (QRFT) and the Qraft AI-Enhanced U.S. Large-Cap Momentum ETF (AMOM) are both actively managed and rely on Qraft’s proprietary AI Quantitative Investment System known as AQUA.

Both funds come with an expense ratio of 0.75% and list on the NYSE Arca.

QRFT targets five factors: quality, size, valuation, momentum and low risk. It relies on AI to determine patterns with regard to how factor returns correlate with different macroeconomic and valuation conditions. From there, AQUA provides the optimal weightings for the securities in the portfolio. The fund will generally hold 300-350 large cap securities.

Meanwhile, AMOM uses AQUA to select a portfolio of 50 large cap U.S. securities that offer exposure to the momentum factor and calculate their optimal weightings.

Qraft Technologies is a South Korea firm that develops AI-based solutions for financial institutions.  

Contact Heather Bell at [email protected]

Heather Bell is a managing editor with Prior to joining the company, she held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and a one-time Jeopardy! champion. She resides in the Denver area with her two dogs, and enjoys hiking in the mountains and frequenting the city’s excellent bookstores.