Did you know that there’s an exchange-traded fund that is driven by artificial intelligence? That fund, the Qraft AI-Enhanced US Large Cap Momentum ETF (AMOM), bought around $1.4 billion worth of Tesla (TSLA) shares earlier this month. It did so earlier this month.
Tesla is now the third-largest stock holding of the robot ETF. The fund’s top stock is Amazon, followed by Facebook, and then Tesla. Benzinga reported that Tesla now accounts for more than 5% of the fund’s portfolio. MarketWatch noted that the fund has a history of accurately predicting the price moves of Tesla shares. Earlier this year, the fund sold its entire Tesla holdings before the start of February when Tesla’s shares were near their all-time high of $900.40.
How AMOM Determines Which Stock To Buy Or Sell
AMOM, which has delivered year-to-date returns of 3.7% at the time of this writing, is a product of Qraft, a South Korea–based fintech group. It tracks 50 large-cap U.S. stocks and reweights its holdings on a monthly basis. Benzinga noted that the fund uses artificial intelligence to search automatically for patterns that have the potential to produce excess returns. Based on that data, the fund constructs actively managed portfolios.
MarketWatch elaborated a bit more on this, noting that artificial intelligence capitalizes on the movements of existing market trends. Then it makes the decision to add, remove, or reweight its holdings. It scans the market and uses predictive power to analyze various patterns that show the stock market’s momentum.
That article pointed out that one of AMOM’s notable achievements was its correct anticipation of Tesla’s stock price moves. AMOM also includes Home Depot (HD), Nvidia (NVDA), and Adobe (ADBE) in its portfolio.
So, even artificial intelligence is investing in a clean energy company. There’s hope for humanity after all!