EquBot launching first ever ETF to use artificial intelligence

The program will parse regulatory filings and more than a million news stories to establish a portfolio of 30 to 70 stocks

Oct 18, 2017 @ 10:53 am

By Bloomberg News

As if active portfolio managers didn't have enough challenges from computer-driven passive investing strategies, now machines are directly horning in on their territory.

San Francisco-based EquBot is launching the first ever exchange-traded fund to use artificial intelligence, according to a company statement on Tuesday. Employing International Business Machines Corp.'s Watson platform, the AI Powered Equity ETF, ticker AIEQ, will attempt to mimic an army of equity research analysts working around the clock, according to Art Amador, co-founder of EquBot.

"There has been an explosion of information," Amador said by phone. "AI provides a more informed way of investing."

The fund, which is being run in partnership with ETF Managers Group of Summit, New Jersey, will use AI and machine learning to scan more than 6,000 U.S. publicly traded companies each day to create a diversified fund, Amador said. The program will parse regulatory filings, more than a million news stories, company management profiles, sentiment gauges and financial models to establish a portfolio of 30 to 70 stocks.

Once the stocks are chosen, a team of human managers at ETF Managers Group will rebalance the portfolio based on the selections -- theoretically, every day if the computer proposes changes.

"When something is in our portfolio, we know why it's in there," Amador said. "We have an investment thesis about that position, and we can explain all the reasons why we own it or all the reasons why we're going to get rid of it."

0
Comments

What do you think?

View comments

Recommended for you

Featured video

Events

Retirement: it's no longer about feeding pigeons from a park bench.

Today's retiree's expect so much from retirement than previous generations and advisers are in prime position to help their clients what's important and what's not.

Latest news & opinion

CFA Institute adding crypto, blockchain to curriculum

Subjects will be added to its Level I and II coursework for the first time next year.

Trump tax plan making dividend ETFs hot

Funds that are seeing inflows largely steer clear of sectors like utilities.

Wells Fargo Advisors continues to see a decline in brokers

Company also set aside $114 million over fees for rich clients.

Morningstar to replace funds in its managed portfolios with nine of its own

New sub-advised funds, offered exclusively through financial advisers, are intended to lower costs and provide 'greater flexibility.'

Average client assets top $2 million for first time

Charles Schwab's latest RIA Benchmarking Study reports organic growth is driving increased AUM and revenues.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print