An artificial intelligence-powered exchange-traded fund caused Tesla and Amazon to go out of business in June. Instead of choosing to load stocks of companies like Qualcomm, Snap and GameStop.
Qraft AI-Enhanced US Large Cap Momentum ETF Trades as AMOM AMOM
on the New York Stock Exchange It removed major tech companies from its portfolio this month. Because it has changed to support retailers and other trading businesses. after the epidemic
Tesla electric car maker TSLA
and online retailer Amazon AMZN.
It represented two-thirds of the fund’s largest holdings in May. But it was completely removed in the latest rebalancing on June 2 with graphics microchip maker Nvidia NVDA.,
which is the sixth largest holding The artificial intelligence project that controls the fund believes these stocks will see a price drop next month.
The standout among the stocks added in June was GameStop GME.,
The video game retailer epitomized the “meme stock”
This was when a group of investors, mostly held on social media platform Reddit, helped squeeze hedge funds’ short positions in companies including GameStop, cinema chain AMC.,
and BlackBerry BB Technology Group
at the beginning of this year The trading frenzy causes billions of dollars in losses for hedge funds. Unbelievable profits for those who set the right time. and ushered in a new era of internet-inspired trading.
GameStop’s share price has risen nearly 10 times since Jan. 15 to Jan. 27, from $35 per share to nearly $350. The stock currently trades at around $300 and represents about 1% of AMOM and the episode. This AI called the image thinks it will move higher in June. And stocks have risen more than 6% since the stock was first added to the fund.
also read: Early Tesla supporters and top fund managers attack Warren Buffett’s strategy. Here’s his investment advice.
Geeseok Oh, Qraft Managing Director and Head of Business Asia Pacific, said: “Few fund managers would risk adding meme stock to their portfolios, but Qraft’s AI model doesn’t have that bias.
The top five stocks by portfolio weight added to AMOM in June are Qualcomm QCOM semiconductor group.,
Major tobacco company Philip Morris PM,
Social media player Snap SNAP,
Medical Technology Specialist Edwards Lifesciences EW,
and Align Technology ALGN Orthodontics Group.
After rebalancing the fund AMOM’s top 5 largest holdings by portfolio weight are Facebook FB .,
Walmart WMT Retail Stores
and Home Depot HD,
Adobe ADBE software company,
and semiconductor manufacturer Texas Instruments TXN..
“This month, AMOM’s portfolio appears to shift towards post-pandemic trade. That was slightly more diversified from the portfolio from the technology-focused strategy in the previous month,” Oh said.
AMOM’s decision to remove Tesla from its portfolio comes after bullish bets failed. The fund bought a $1.4 million stake in the electric car company in May. After avoiding such stocks for several months. And shares in Tesla fell 7 percent before AI exited the fund. This Tesla crash is rare for its AMOM-controlled robots, which otherwise have a strong track record of predicting movements in the company’s stock prices.
positive: Don’t Ignore These 3 Changes in Investing Highlighted by GameStop, BlackBerry and AMC, Lead Economist Says
AMOM has been listed in New York since May 2019 and has a total return of 11% in 2021 and 53% last year. It outpaced the S&P 500 Momentum Index, which was up 26% over the past year.
AMOM is an actively managed portfolio powered by artificial intelligence. Track 50 large US stocks and adjust holding weights each month. Based on a momentum strategy, AI is behind stock picks that take advantage of existing market trend movements to inform decisions to add, subtract or weight their holdings. Artificial intelligence scans the market and uses its forecasting power to analyze patterns. that shows the momentum of the stock market
The fund is a product of Qraft, a Seoul-based fintech group. South Korea which leverages AI in the company’s investment products This includes the other three versions of the main AI-selected indices: US large-cap index QRFT.
; US large dividend index HDIV
; and the NVQ US value index..
The entry of AI-operated funds onto Wall Street has promised a new future for high-tech investing. In theory, researchers have shown that AI investment strategies can beat the market by 40% per year when tested against historical data.
But Vasant Dhar, a professor at New York University’s Stern School of Business, And the founder of SCT Capital Management, a machine learning hedge fund, argued on MarketWatch in June 2020 that AI-powered funds would not “crack” the code of the stock exchange.
With caution, Dhar said it would be difficult for a machine-learning-backed fund to maintain a lasting advantage over a market that has He advises investors to consider AI systems to ask difficult questions. This includes the possibility that the “edge” of AI will still exist in the future. And what is the inherent uncertainty and range of the fund’s performance?