The ETF – called the “Equbot with Watson AI Total US ETF” – was recently filed with the U.S. Securities and Exchange Commission (SEC). To have the ticker symbol “AIEQ,” the new fund would be subadvised and managed by Equbot, an investment management firm that specializes in applying artificial intelligence (AI) to investing.
According to the SEC filing, the new fund is described as “actively managed” and based on a “proprietary, quantitative model.” In finance, quantitative analysis – as opposed to qualitative analysis, which relies on the subjective judgment of analysts – typically uses mathematical and statistical methods to develop models to help find investing opportunities.
The Watson AI model in the new ETF will perform a fundamental analysis on up to 10 years of historical data of primarily U.S. equity securities, and then apply it to the latest news and economic data. Each day, about 30 to 70 companies of any size will be identified that, according to the model, have the greatest potential for appreciation.
The fund’s investment advisor anticipates using the Equbot model’s recommendations to decide which securities to purchase and sell. According to the filing, the fund “may frequently and actively purchase and sell securities.”
The “Equbot with Watson AI Total US ETF” will trade on the NYSE Arca exchange. Fund fees, such as the expense ratio, were not listed in the filing.