Revolutionizing Investment Management:
Qraft Technologies and the Rise of AI ETFs
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Investing has been a wild ride since the beginning of time. But hold on
tight, because things just got a whole lot wilder with the rise of
artificial intelligence in the stock market! Yes, you heard that right —
robots are now managing your money and they’re doing a pretty good job so
far. So sit back, grab some popcorn and let’s take a ride on the AI express
with Qraft Technologies and their AI ETFs. Get ready for a journey filled
with alpha, beta and a whole lot of zeros and ones. Because it’s time to say
goodbye to traditional investment management and hello to the future of
finance!
Qraft AI ETFs leverage AI technology to provide investors
with balanced exposure to factors that have historically been associated
with strong investment returns. The ETFs aim to find high alpha factors and
extract investment strategies to achieve potential outperformance.
QRFT seeks to provide investors with exposure to
quality, size, valuation, momentum, and low risk by using AI to identify its
historical relationship with macroeconomic and financial factors and
determine which factors are likely to perform well in the future. AMOM
leverages AI to deliver purer exposure to the momentum factor and has
recently outperformed the S&P 500, largely due to correctly anticipating the
price movements of Tesla.
Qraft Technologies is a fintech company
focused on driving innovation growth in the asset management industry
through AI. The company currently offers four AI ETFs and other products
such as a robo-advisory solution and an AI order execution system.
Investors should carefully consider the investment objectives, risks,
charges, and expenses before investing in Qraft AI ETFs. The funds provide
actively managed exposure to U.S. large cap stocks with AI managing the
security selection process. The ultimate goal of Qraft is to provide a high
level of alpha continuously with AI technologies.
Qraft AI ETFs are
doing well, but still face challenges from other AI-powered competitors,
such as AIEQ ETF, etc. (And in forward testing, the growth rate of
CandleLight quant trading system, which is designed by us has surpassed
competitors since 2022. More
details: Two Years, 100+ Sets of Testing Results Confirm: Machines Can Beat
Human Aces in Stock Market!)
Investing has always been about finding the right balance between risk
and reward. And in recent years, the rise of artificial intelligence has
presented a new and exciting opportunity for investors looking to maximize
their returns and minimize their risk.
With ten patents awarded to date and more pending, Qraft’s intellectual
property includes innovations in technology and AI, including proprietary
trading and order execution tools, asset price prediction, and portfolio
generation.
The Qraft AI Risk Indicator is a prime example of how AI
is changing the way investors approach their portfolios. The tool predicts
market risk for the coming week using an easy-to-interpret scoring
methodology of 1 to 100.
In today’s challenging investment
environment, where volatile markets and macroeconomic factors are making it
harder for investors to navigate risk, Qraft’s AI Risk Indicator provides a
much-needed tool for managing near-term portfolio risk. The tool takes in
over 70 different macro inputs in nearly real time to assess current
momentum, volatility, and correlation metrics, and can be used as a general
indicator of market risk or as a tool to help in asset allocation decisions
between cash and equity positions.
Since its launch, the AI Risk
Indicator has demonstrated its value in a volatile market. With scores
ranging from 1 to 52, the model has shown that it can adapt rapidly to
changing market conditions and has had a positive impact on a hypothetical
portfolio comprised of U.S. Large Cap Equities. In the first six weeks after
its launch, this portfolio would have returned 4.99% compared to 3.90% for a
portfolio invested in U.S. Large Cap Equities alone.
The adoption of
artificial intelligence (AI) in the finance industry has increased
significantly in recent years, but there are still major challenges to
overcome for more widespread integration of AI. Two of the main challenges
are lack of usable financial data and difficulty in explaining AI decisions
(XAI).
One of the major problems of usable financial data is the
prevalence of poor data quality, which leads to data wrangling and the costs
associated with it. To tackle this issue, Qraft Technologies has developed
the Kirin API, which eliminates biases in financial data and allows for
easier filtering of specific investment universes.
Another issue
faced in the adoption of AI in finance is XAI. The OECD’s 2021 Business &
Finance Outlook highlights the difficulty in explaining AI decisions to
consumers, regulators, and lawmakers, and raises concerns about the ethical
use of AI. To address this, Qraft has developed the Alpha Factory, which
allows human input to influence portfolio construction and fill in gaps in
financial data, while also providing accountability and transparency.
While AI is a powerful tool, it is important to overcome these
challenges to ensure that AI is utilized in a responsible and effective
manner in the finance industry. With the right support, AI can help asset
managers to make informed decisions and optimize their strategies with
scalability.
Investing in the stock market is a challenging and risky
business, with many active-fund managers failing to pick outperforming
stocks or mistiming the market. As a result, many investors have opted for
passive strategies, leading to a significant migration away from high-fee
funds. To counter this trend, a new breed of funds has emerged, using
artificial intelligence (AI) to manage the portfolios. This new type of fund
aims to appeal to those who have moved away from active strategies but are
looking for something more than index-based or “smart beta” funds.
The AI-based funds, such as EquBot’s AI Powered US Equity ETF (AIEQ) and
Qraft AI-Enhanced US Large Cap ETF (QRFT), sound like “quant” funds but
aren’t entirely rule-based. Instead, they rely on the discretion of
portfolio managers, which can be a drawback for self-directed investment
platforms and advisers who have moved away from discretionary-managed funds.
For these funds to be successful, they will need to demonstrate notable
outperformance from broad equities.
In theory, AI-anchored
stockpicking should outperform traditional methods. With the power of
computing and cloud technology, machine learning engines can quickly analyze
a vast amount of data, such as regulatory filings, news articles, social
media posts, and quarterly results releases. This allows the AI system to
make investment decisions without human bias and adapt to changing market
conditions in real-time.
One of the key advantages of AI-based funds
is the ability to analyze unstructured data, such as text and tweets.
EquBot’s AIEQ, for example, uses deep learning algorithms and natural
language processing technologies from IBM Watson and Google Deepmind to rank
stocks by their likelihood of price appreciation. Portfolio managers still
oversee the AI model’s performance, but the speed and accuracy of the AI
system allow them to make better investment decisions.
However, there
are also some challenges associated with AI-based funds. Modeling errors can
occur when data is limited, leading to high turnover in the portfolio, which
can result in transaction costs and negatively impact returns.
Despite these challenges, AI-based funds show great promise as a new type of
investment vehicle. However, it is still early days, and many of the funds
that have been launched have already closed due to poor performance. As more
AI-based funds come to market, it will be possible to determine which
application of the technology is most effective and whether they can help to
slow the migration towards passive funds. Ultimately, while AI systems are
unlikely to replace human managers, they have the potential to enhance the
way active managers conduct research and provide a valuable tool for
investors seeking to generate higher returns from their investments.
And so, the revolution of AI ETFs continues to steamroll its way through the
investment world, with Qraft leading the charge. But remember, just because
you have AI on your side, doesn’t mean you can kick back and relax. Because
let’s face it, the stock market is still the Wild West of finance, and
there’s always room for a good old-fashioned tumble or two. So, saddle up,
put on your thinking cap, and remember to always keep an eye on your
portfolio, because as the wise John Wayne once said, “Life is hard, but it’s
harder if you’re stupid.”
PS.
Two Years, 100+ Sets of Testing Results Confirm: Machines Can Beat Human
Aces in Stock Market! |
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