AI Powered ETF AIEQ Is likely to be a Uncommon Case of Synthetic Intelligence Being Ineffective…
Equibots and Watson and hedge fund-like methods are much like when monetary advisors nonetheless attempt to cite Nobel Prize-winning theories on asset allocation from the 1980s. It’s product advertising, not alpha-hunting, of us.
That doesn’t imply that there isn’t some try and do effectively right here, and provide one thing that buyers can glom on to, powered by AI. However outcomes depend, particularly in a market the place tech shares dominate. The most important detrimental of AIEQ just isn’t its technique, however somewhat its incapacity to point out it’s considerably higher than QQQ. It’s not likely even shut, partly because of the sturdy efficiency of QQQ lately.
Portfolio Overlap: Why Comparable Holdings Don’t Imply Comparable Outcomes
A look on the high holdings of that widespread ETF and AIEQ reveals that there’s rather a lot in frequent, at the very least on the high of the portfolio. That may sound like it’s a good factor. Nonetheless, it’s the high motive to not take into account a $100 million ETF when there’s a firmly established comparable fund with a decrease expense ratio (versus AIEQ’s zero.75%) and a behavior of trailing the non-AI-driven QQQ.
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